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Open Steel Prices Downward Pressure In 2017 The Roller Coaster Market Could Once Again Be Staged


2016, the steel market to break the situation envisaged by the majority of people, the emergence of roller coaster market. After a year of soaring, plunging, shock rise, the trend of weak callback, the domestic steel industry at the end of 2016 signs of decline.
Just in 2017, pointed out that the latest index report IOT steel logistics Specialized Committee released in January 1st of December 2016, the domestic steel industry PMI index was 47.6%, up 3.4 percentage points lower after two consecutive months of recovery again fell to 50% below the line ups and downs, the industry boom decline.
The report also shows that the production index continued to fall to 6 month low. New orders index and new export orders index fell significantly to the contraction range, and the amplitude is significantly greater than the magnitude of the decline in the production index. Finished goods inventory index bottomed out, the purchase price index fell sharply.
Xinhua News Agency commented that the current supply and demand of domestic steel market two weak, demand fell more obvious oversupply pressure, enterprises began to support the cost of inventory backlog, steel prices have weaker steel prices downward pressure.


In the new year, steel prices will be how to interpret
According to the Shanghai Steel Union statistics, in early 2016, steel production is obvious, the market pessimism by the early effects of generally low stocks, with the spot demand season, short-term supply and demand mismatch, spot prices soared, and reached a high stage in late April, some products or even more than 60%.

Then, in a reversal of supply and demand, steel production background, steel prices fell sharply, a decline of nearly 1000 yuan monthly. In late May, both sides in a stalemate, steel prices showed rangebound trend. By the end of June, steel prices began to rebound, the traditional off-season demand good performance, while the supply side supervision, environmental protection in the nationwide G20 summit, Tangshan limited production factors such as the decline in steel prices continued to rise, promote.
September because demand is not scheduled to erupt, drive steel prices slightly weaker. In October, as well as the improvement in demand, such as the impact of rising inflation, the rapid rise in steel prices. Since November, steel prices again after a slight pullback. Near the end of the year, improvement in the haze, iron and steel production enterprises to limit production order lifted, the superposition of demand under the background of the coming season, steel prices significantly callback. But throughout the year, steel prices are still rising sharply last year.





The latest index report IOT steel logistics Specialized Committee released from the characterization data, pointed out that the domestic steel production actually declined slightly. December 2016, the steel industry production index was 44.9%, down from the previous month by 3.9 percentage points, the lowest level in the last 6 months, indicating that the domestic steel production will continue to decline.
Northeast Securities analyst Huang Qizhi told the first financial reporters, haze weather caused the December major steel mills have entered the production rhythm, production capacity is suppressed. At the same time along with the work to promote the production capacity, to the inventory is also in an orderly manner, digestion inventory also affect production capacity. But this does not mean that the steel industry to re-enter the downturn cycle.
It is worth noting that, with production related procurement activities are still showing an active situation. Purchasing volume index fell 4.8 percentage points from the previous month, but still at the top of the critical point of 50%, for the 50.3% consecutive month in the expansion area.
The iron and steel industry PMI index fell to the ups and downs of the line at the same time, steel prices began to fall in December last year. Last December second last week, steel prices continued to fall, weakening the influence of environmental production of steel power, the whole week, Tangshan billet prices 5.92% lower than the previous week to 2860 yuan / ton, Shanghai steel prices fell 5.48% to 3280 yuan / ton, Shanghai hot rolled and cold rolled plate respectively decreased 3.69% and 0.57%.
Debt credit research team believes that the cost side of steel prices to support efforts to weaken. Although the supply side pressures continued to decrease, but the haze caused by construction of suspension, the demand side of the poor performance of steel prices in the short term or will remain weak. But the Shanghai Steel Union research thinks, near the end of the year, improvement in haze, iron and steel production enterprises to limit production order lifted, the superposition of demand under the background of the coming season, steel prices will appear obvious callback.
In fact, in terms of absolute price, although the steel prices in 2016 there has been a significant rise, but from the long cycle, the current price level is still relatively low in the region. This means that in 2017 there is still the possibility of upward price of steel.
Shanghai Steel Union chief analyst Wang Jianhua believes that in 2017 the supply may be shrinking, demand basically stable, no big "black swan" event, the ore price is likely to remain in the average price of about 70 dollars; and then continue to limit production of coal, coking coal coke price still has 50% to increase the possibility of steel price possible; there are more than 15% of the increase in space.
Lange steel chief analyst Chen Kexin also believes that the factors which will make the steel and increase the cost of transfer to the sales price possible, resulting in steel prices upward force. But he believes that even if the price of steel rose in 2017, the process will also be accompanied by a huge shock, many roller coaster market may continue to perform.
Kaifeng investment chairman Wu Xing said, 2017 steel fundamentals than iron ore fundamentals, supply side reforms may bring extra profits to the mills.