Steel prices will shock down

Recent macro-level events, the Federal Reserve to raise interest rates and raise the number of expected next year, the Central Economic Work Conference put forward to prevent financial risks, inhibit the bubble of funds on a more important position in November economic data, real estate and infrastructure investment growth both Down, the overall trend of the formation of rebar futures more obvious negative effects. Insiders said that although the Beijing-Tianjin-Hebei and the surrounding areas issued a large-scale heavy pollution red warning, but the impact of supply-side contraction in the market began to weaken, is expected to rebar futures will shock down.

Steel stocks began to rebound steadily

Iron and steel spot trading platform --- West New Shinkansen comprehensive inventory monitoring data show that last week the country's 35 major markets rebar inventories of 4.364 million tons, an increase of 17.5 million tons, an increase of 4.18%; wire rod inventory of 993,000 tons, An increase of 2.4 million tons, an increase of 2.48%. From the national wire rod, rebar, hot rolled coil, cold rolled coils, plate five varieties of total inventory, the national total inventory of 8,952,000 tons, an increase of 139,000 tons the previous week, an increase of 1.58 / RTI & gt;

Industry sources, the national steel market inventories rose for the fourth consecutive week, the current level of inventory was essentially flat over last year, including construction steel inventories have been significantly higher than the level of the same period last year, sheet metal inventory was still significantly lower than the same period last year. However, taking into account last year's market situation is extremely pessimistic, the market and steel stocks are down to very low level at the end of this year from the total inventory is still at a low level, not the formation of significant pressure on the late trend of steel prices.

December 14 to 16, the Central Economic Work Conference held in Beijing, 2017 economic work for the meeting set the overall tone, to convey an important policy signal. The industry said that 2017 is to tackle key production capacity, to more stringent control of new production capacity, more determined to eliminate backward production capacity, more crack down on illegal acts, indicating that steel production capacity next year will not relax. Second, the economic situation in 2017 set the tone to delete the overall goal of maintaining the "economic operation in a reasonable range," the statement shows that the central intention to play down the economic growth target, and pay more attention to economic growth of the endogenous kinetic energy and long-term Persistent. 2017 real estate regulation put forward "classification control" and "city policy", a second-tier cities reaffirmed "the house is used to live, not to speculation," at the same time, stressed that "focus on solving three or four lines of urban real estate inventory Multi-problem ". 2017, the state's attitude to real estate will continue since October 2016 to strengthen the focus on tightening the general idea of the city in 2017, real estate sales and investment will face downward pressure.

Later demand may be weakened

November last year, the relevant data have been released, from January to November real estate development investment increased by 6.5%, down from January to October 0.1 percentage points; infrastructure investment rose 17.2%, down from January to October 0.4 percentage points. 1 - November real estate, infrastructure investment growth both down, while housing new construction area, real estate enterprises in place capital growth rate is also fully down, the late domestic steel market demand will face further weakening of the pressure.

In addition, the data show that in November China's crude steel production of 66.29 million tons, up 5%; average daily output of 2,209,700 tons, down 0.02% compared with October. Supply and demand data show that in November crude steel production year-on-year growth rate, average daily production also maintained high, and in November the real estate and infrastructure investment growth were down, the market supply and demand situation will deteriorate, the late steel price trend will Will form a suppression.

Qiuyue Cheng, a senior researcher at Nishimoto Shinkansen, said that the current expectation of production capacity and environmental management caused contraction in the supply side has become the only positive support for steel prices, the fundamentals of the market in terms of demand, cost and capital have been bearish. Especially last week, the Federal Reserve to raise interest rates and raise interest rates next year, the expected number of times, the Central Economic Work Conference stressed that strengthening real estate regulation and monetary policy sound neutral, making the focus of the overall market focus gradually reduced demand and tightening monetary policy tightening level, On the supply level after several rounds of speculation after the degree of attention has been cooled. Expected short-term domestic steel prices will be shocks down trend.