Difficult To Reverse The Slowdown In Steel Demand During The Year Can Not Be Achieved Limited
The first half of the way up with different steel market, steel prices began to turn around from the June drop, the Chinese steel industry faced increasing costs and sagging demand for the double pincer attack. Industry and analysts said domestic steel prices turning point has been formed, although the decrease in prices is unlikely, but slower demand for steel is difficult to reverse, at least in the year, steel prices expected to continue to shrink profit margins.
The first half of this year, domestic steel prices rose about 30%, while from June to date, steel prices fell an average of nearly 15%. Analysts said the demand rather than supply, the terminal will determine the price of domestic steel and iron and steel industry in the future trend, and steel enterprises may take action to limit production price is estimated that hard work. Chen Ying
Baosteel secretaries to directorate said earlier, domestic and foreign automotive and appliance industries, the demand will be further inhibited in the second half of steel demand.
China Business Network steel analyst Ma & P claimed that the steel industry in the downstream Pipe Enterprises reduced production, the output of nearly 60% also. The international market demand is not optimistic about China's current steel prices and more limited international orders from the Middle East, Africa and India, Southeast Asia markets were weak, export prices also fell.
"Part of the steel mill has been the gateway to the life and death, of course, more limited now SMEs. But later steel prices will drop, the profit of steel enterprises will continue to compress," the joint metal mesh, said steel analyst Zhang Ping .
Hai Tong Securities analyst Liu Yanqi steel, said domestic steel price decline is greater than the reduction in international steel is also greater than the major raw materials such as coke, Iron ore The decline, which will reduce the profit margins of steel prices, resulting in a lot of steel can not be maintained.
Recent semi-annual report of listed companies to disclose the steel showed that the profits of listed iron and steel enterprises has been a marked decline in growth. Largest steel companies in China - Baosteel first half net profits rose 18.2%, significantly lower than the 83.97 percent increase over the same period last year; second-largest steel enterprises in Anshan Iron and Steel in the first half net income increased by 24.48%, also lower than the same period last year 54.52 % increase.
Real estate as an important indicator of demand returns
Liu Yanqi that construction steel demand steel consumption accounted for more than 50%. Among them, the real estate market as demand for steel is an important indicator of warming. While simple real estate industry in the steel demand in the proportion of about 13%, but real estate is a long chain, will drive the construction, appliance and construction machinery and many other industries.
"The main worry point is the late real estate, fear needs get up the mountain," Zhang Ping, also known as. National Bureau of Statistics data show that in July this year, China's housing climate index was 102.36 the country since November last year, eight months consecutive drop since.
Shun Humanistic understanding to morality that securities analysts steel, construction, automotive and home appliances in China's three major steel-consuming industries have emerged signs of slowing, demand for its steel market outlook, the decision to become a decisive factor in steel prices, steel demand expected to pick up first half of 2009 at the earliest to appear.
He said, though, including some local governments, including Shanghai, has already begun to expand the scale of investment, spur economic growth, raising steel demand is good news, but the rebound of investment in steel demand to be transmitted to have a certain delay, This can not be achieved during the year.
"Steel demand this year has been impossible to pick, but next year may also, if the state relaxed the credit and investment to re-up... It has a very optimistic estimate." He said.
Consulting firm SteelBusinessBriefing, according to industry forecasts, this year China's steel consumption will only increase by 8-10%, the lowest increase of 16% is only half of the first half.
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