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Steel Price Increasing Analysis

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Update time : 2017-08-14 15:53:32
In July, domestic steel market extended the upward trend. According to the statistics of Mysteel, among 25 main cities, the price of screw-thread steel  increased CNY10-70 per Ton in 14 cities including Shanghai, Ji’nan, Changsha, Taiyuan, Chongqing etc.; the price of hot rolling increased CNY10-80 per Ton in 14 cities including Nanjing, Guangzhou, Beijing, Chongqing etc.; the price of medium plate increased CNY10-50 per Ton in 16 cities such as Shanghai, Fuzhou, Tianjin, Chongqing etc.
Since this year, domestic steel price trend is ups and downs. After Spring Festival, the steel market was once lower, but from May, the steel prices begin to increase by the influence of reducing the capacity.
The latest statistics of CISA also shows, the average ex-factory settle price of key steel enterprises in the mid-June is CNY3866 per Ton, and it increased CNY201 per Ton than last ten-day; crude steel is CNY2070 per Ton, and reduced CNY2 per Ton; cast iron is CNY2171 per Ton, and reduced CNY25 per Ton; coke is CNY2070 per Ton, and increased CNY88 per Ton.
RCB Bearing thinks, the reasons influenced the price trend of 2017 is mainly as the following points:
First, environment protection and capacity reduction will continue to affect the market. The requirement of environment protection will be much more strict in the future, and the influence to the market will be lasting. The factor of capacity reduction of intermediate frequency furnace in the fourth quarter of last year has large influence to the market in the beginning of this year, and the supply of screw-thread steel will be tight because of the quit of small and medium brand.
Second, capital construction supports the steel price strong. At present, there are a lot of infrastructure projects approved in China, and the sales of construction machinery also has a obvious increase in the recent months, which indicated the infrastructure will be continue to increase in the coming days. In addition, America's new President, Donald trump also has the measures of capital construction enhancement, if the infrastructure of China and the US form a resonance, it will be a strong support to the industrial market in 2017.
Third, the global economy is still in recession, although asset class prices have risen sharply under monetary stimulus, the same asset class bubble is growing rapidly and the risks are accumulating. Strong stimulus is not sustainable, so it is possible to rule out a return to the bottom in the second half of the year.  
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