China's steel prices will rise in the current high and low in 2013

Following the "opener" at the beginning of the year, the steel price has shown signs of a correction in recent days.

The steel market in 2012 experienced a long period of downturn. "Bank credit lines for steel traders have contracted tightly, so that the amount of new capital in the market lacks support for restocking, resulting in very fast destocking." Tang Yibo, analyst of steel industry at UBS Securities China Equities Research Department, recalls Last year, Steel Times stated that with the approval of a series of urban rail construction projects in October, the macro expectations began to improve and the manufacturing industry has also recovered, and the steel market has gradually entered into a make-up inventory cycle. Restocking began in the fourth quarter of last year, and steel prices also showed signs of rising. Especially in December, steel prices rose rapidly.

“This year's steel prices may have a pattern of highs and lows before.” Tang Yibo predicts that the restocking of steel products will temporarily stop in the last month. With the second quarter infrastructure activity and the recovery of the manufacturing industry, the physical demand for steel products will also increase. Gradually increase, steel prices will enter a new round of rising channels after April. He predicted that China's crude steel production this year will increase by about 3%, capacity utilization rate will be 83%, and steel exports will be around 60 million tons, and imports will not change much.

According to Tang Shubo, the area under construction for affordable housing, commercial housing, and non-residential commercial housing in China will reach its peak this year. Although the new construction area will increase, the increase will not be too large. Many listed manufacturing companies set this year's growth target at 5%-10%, but Tang Yibo believes that the growth of demand for steel products in the manufacturing industry is relatively slow. Therefore, the growth rate of steel demand will not be large next year.

He Hangsheng, president of the business club’s steel division, predicts that the price of steel will be roughly the same as at the end of last year. “The domestic steel industry is in the period of opportunity for transformation and upgrading and elimination of backward production capacity. It is expected that the overall market this year will increase slightly on the basis of last year.”

“With the acceleration of urbanization, this year's steel production capacity will further increase, and the relationship between supply and demand will tend to improve.” Liu Hongjiao, an analyst at Business Club, predicts that the spot price of rebar is expected to exceed the 4,000 yuan/ton mark this year, while the price is expected to increase. To reach 4300 yuan / ton.

For the upstream iron ore, although its price has increased from US$110/ton in December last year to more than US$150/ton in January of this year, Tang Yubo believes that the main reason is to make up stocks, and this year’s supply pressure. Gradually emerged, the ore price will be lowered, and it is expected to decline by 10% each year in 2014 and 2015.

Tang Yubo explained that from the perspective of last year, China’s crude steel production was about 710 million tons, which meant that the demand for iron ore was 1.14 billion tons. On the supply side, domestically produced ore is about 560 million tons, and imported iron ore is 766 million tons, totaling about 1.326 billion tons, which is almost 200 million tons higher than the demand. Therefore, he told the ** Daily reporter that this year's ore prices are not optimistic, "only if the iron ore supply has been limited to a certain extent, then the ore price will have a relatively big improvement."

In 2012, the Chinese steel market had already ended. It was like boiling a frog in a warm boil. Unconsciously, the entire steel industry was mired in mud; a lot of big events took place, which was nearly 1/3 of the steel. The pass enterprise broke the production or fled the industry. The unique loan model of mortgage and joint insurance has finally torn the harmonious outer packaging under the gloomy market conditions and infidelity; the bank financial institution The steel industry has repeatedly smashed the knife; the production capacity of steel production Shi Shiran walked into the 1 billion tons of the door and it was hard to come out...

Many unbelievable and bizarre experiences have caused the steel market in 2012 to suffer hardships. However, in the last quarter, there was a reversal of the contrarian trend; spot steel prices have soared, and raw materials such as imported iron ore have soared. The wild horses that took off the horses; followed the rules of the steel market for decades were beaten dilapidated, the off-season is not faded, and the Chinese steel market in the deep winter is busy and spring, but it is just doing other people's clothing.

Having arrived in 2013, just after the new year of the 2012**** baptism, we were once again artificially given too much of its expectations. We remembered that the last time it was two years ago that winter, it was relatively warmer than this year. Imagine the future and sing the coming spring market. At that time, 10 million units of affordable housing projects were supporting, and the current situation was replaced by the direction of “new urbanization.” Only a few additional supports are needed. It is also true that the construction of a house is inseparable. The take-off that has taken place in the past decade or so is not just a matter of demolition. If it is repaired and rebuilt, it is in accordance with it.

So for the time being, we can make predictions about the future. We can only say a general trend. The financial attributes of steel and the impact of global capital markets will give this steel market too many variables. Perhaps this year's steel industry will be better than 2012 as a whole. Years, but the road to recovery must have many ups and downs.

There is a strong expectation for the steel demand in the new year. This is very obvious. Anyone can see the hope of the steel market from the policy of the new urbanization determined by the “***”, let alone The trillions of infrastructure projects have been put into operation one after another, and the economic recovery trend has been further confirmed since the fourth quarter of 2012, which has drawn a big slice of the future demand for steel. It seems that the future of the steel market should be a very good situation, why there are still some pessimistic warnings?

Well-known things, the reason why 10 million sets of affordable housing projects two years ago disappointed the steel industry. In recent years, many major projects did not bring about the expected results of the use of steel, in large part because of funding issues. In the final analysis, it is money. In 2013, major infrastructure projects such as railway construction, whether the development of new urbanization will fall into the embarrassment of “having projects without funds”; it is not clear to anyone at the moment; the direction of the central bank’s New Year policy has long been determined and a stable fiscal policy has been maintained; Since the CPI index rebounded significantly in December last year, and the domestic economic trend continues to pick up, a new round of rising cycle has been initiated; in 2013, it will inevitably bear the pressure of inflation, and the adjustment of the central bank’s policy will be difficult to achieve. These months are so easy.

Therefore, the capital side is the biggest reason why this series of major measures will be decided in 2013.

For another reason, it fell on the iron ore market. At the end of 2012, the price of imported ore soared to US$159, which was more than 80% higher than in September of the same year. Raw material prices have become a solid support for the rebound of high steel prices. By. According to the characteristics of the iron ore market that is prone to rise and fall, coupled with the strong demand for steel production capacity in China, it is impossible to significantly reduce the support; only regret that the iron ore market before and after the Spring Festival can not continue to rise, but The possibility of a fall is not great.

In other cases, as well as the global economic situation, the debt crisis in the euro zone has been pending. In 2012, the domestic steel market was hurt. In addition, the fiscal cliff crisis in the United States only received a buffer period of about two months. If the expiration of a month’s decision is not resolved well, the impact on the global economy, the stock market, and the commodity market will be enormous.

Last but not least, to say that China's iron and steel industry itself is a chronic disease, there are institutional statistics that the domestic steel production capacity has passed the 1 billion tons threshold by the end of 2012; it is a matter of China's steel production capacity surplus phenomenon is even more serious; of course, there is the industrial economy Whether the warming is going smoothly or not, it will affect the actual trend of the steel market in the future; therefore, the author is still that view: In 2013, with the hope of setting sail, it is not good to go far, just to be down-to-earth, to meet Possible coexistence opportunities and challenges.