The Ultimate Conjecture Of Steel Prices In 2008

The industry believes that the steel...

Since December, the continuous rise in the price of steel market has attracted people's attention. Although the end of the year is the off-season of steel sales, the situation is different this year. Domestic steel prices have risen sharply in a short time, and the prices of many varieties have reached a new high.

The industry believes that the rise in steel prices has some internal and external factors to support, but there are different views on the price turning point when it comes to it. Optimists expect that steel prices will continue to run high under the pressure of growing "rigid demand", and opponents believe that with the increase of the macro adjustment intensity next year, the demand for steel downstream is expected to change, so that steel prices will fall at a high level.

Dealers benefit from rising steel prices

"The rise in the price of steel has not been seen in recent years.

The price is generally more than 20% higher than that in 5 and June. "

Recently, in the North Second Ring steel market of the provincial capital, Mr. Zhang, the owner of a trading company, told reporters that the price of the steel market has been rising for more than a month, and the most expensive ones are the long materials and rebar steel for construction, and the market price of iron powder has increased by more than 20% compared with that of six months ago. Moreover, judging from the current paction situation, this trend will continue to the first half of next year.

According to reporters, entering the two week of December, the price of steel varieties in the market rose at 400 yuan -700 yuan / ton, or 10% to 20%.

Judging from other cities in China, the price of steel has also risen substantially. The average increase of long timber varieties is more than 250 yuan / ton, the price of rebar reaches 4676 yuan / ton, a new high in history, and 200 yuan / ton for plate type varieties.

Some steel dealers admit that the hot market may make this year the highest profit margin in many years.

Insiders said that in this round of price increases, the cost of production enterprises under pressure, in fact, the profits are not high, the price increases in the hands of traders have been expanded, their gains can usually reach two times the increase of steel mills.

Cost pressure is the main cause of price increase.

Market participants believe that demand pull and raw material prices generally rise, making steel prices can run in the high price range for a long time.

Among them, the price of raw materials, coal, electricity and oil pportation has become the main driving force leading to the rise of steel prices this year.

According to the reporter's understanding, at present, Tangshan's iron ore price of 66% is 1445 yuan / ton, up 5% from last month, up 105% compared with the same period last year.

Among them, the price in December 7th reached 1485 yuan / ton, a new record high.

Tang Gangzhun first metallurgical coke to the factory quotes to reach 1680 yuan / ton, compared to 1200 yuan / ton two months ago, or around 40%.

The continuous rise of coal and electricity pportation since this year has also greatly increased the cost pressure of steel enterprises.

Insiders told reporters that in the past two months, the overall cost of iron and steel enterprises is in a rising channel, and the production cost of steel mills has increased by about 30% in the past two months.

In contrast, the growth rate of steel exports has been declining this year. After the tax rebate adjustment for steel exports this year, the price of steel is changing from "export driven" in the first half of the year to "high cost supporting high prices".

In addition to cost pressures, the structural adjustment of steel industry this year is also a factor.

The long timber used for construction has maintained a strong demand in the domestic and international markets. At present, domestic real estate and infrastructure need a large number of low-end varieties such as long timber, because the capacity of large steel plants in this area is gradually decreasing, and a large number of small steel mills have been shut down this year, and to a certain extent, these low value-added and low tech steel varieties are also in short supply.

Rise?

Drop?

Two polar conjecture of steel price next year

At present, whether the rising trend of steel price can continue, the insiders have different views.

"I think the domestic market demand for steel is rigid at present, coupled with the adjustment of industrial structure, a large number of backward production capacity will be eliminated in the next two years, and the industry concentration will be greatly improved. It is hard to see the turning point in such a rigid demand in the short term."

Recently, Wang Dayong, Secretary General of Hebei Metallurgical Industry Association, said in an interview with reporters that the accelerated and sustained investment in fixed assets in the future urbanization will bring a lot of demand to the steel industry.

For example, the planned Caofeidian Binhai New Town and Tianjin's new China eco city, the two large-scale city planning projects, will have no less demand for steel products than the Beijing Olympic Games. This rigid demand will bring opportunities to the healthy development of the steel industry.

A broker who studies the steel industry also believes that the rising price of steel has a solid supply and demand base, especially when the monthly volume of steel exports continues to decline.

From the perspective of demand, the huge growth of downstream industries has brought strong steel consumption capability. From the supply side, the expansion behavior of most state-owned steel enterprises is self-discipline, and the projects which have not been approved by the NDRC have not been launched.

As long as supply and demand continue to improve, steel prices will continue to rise.

At the same time, some people are skeptical about the rise in steel prices. They suspect that the over speculation of the market is not a healthy rise. They worry that steel prices will fall before and after the Spring Festival.

In addition, the industry is expected to raise the export tariffs of steel again, which is believed to be effective in controlling steel exports and suppressing the formation of domestic steel prices.

Next year, the situation of steel exports is grim. In the case of increasing domestic and foreign steel price gap and increasing export tariffs, the profit margins of steel export will be compressed, and the enthusiasm of domestic steel export will be hurt. Next year, steel exports will decline.

At present, the main customers of the domestic steel market come from the construction industry. However, with the recent introduction of control measures in real estate market, the market is in the doldrums. Some people have issued a warning that the demand for steel market is likely to change next year.

Next year's monetary policy will be tight and investment growth too fast will be curbed by tightening monetary policy, which will probably inhibit the growth of steel demand. These policy constraints will have a far-reaching impact on the steel price trend next year.