NEWS

Steel demand in 2016 is difficult to have bright spots, the Prime Minister referred to the beginning of the statement: do not increase the demand stimulation, not to flood irrigation to boost demand, still insist on structural adjustment to stimulate demand associated with the demand for steel terminal industry has not shown signs of improvement. So hard to maintain long-term demand for steel demand state.

Steel market supply side into the "supply-side reform" phase, the capacity to resolve the main objective, is one of the main tasks of thirteen to five. Control means in accordance with the supply side policies through tariff reduction (belonging to fiscal policy, as well as financial subsidies) and oriented monetary tightening and other means, with the market regulation mechanism, the final restructuring of the steel industry structure, the formation of several large steel group, maximize the degree of concentration for the future with the "along the way" foundation output capacity, the capacity to resolve the long complicated, so the supply capacity of the compression process is accompanied by a pressure drop, can only bring the price rebound is not yet brought the price reversal.

So a macro perspective, steel (primary means of steel finished) at the bottom of the shock, dropping and rebound alternating.

Second, the spot market

1, the demand for seasonal influence on the market increased.

Domestic demand for a hard landing, seasonal demand features will be highlighted. Real Estate Real estate is difficult to digest inventory means a substantial boost steel demand; infrastructure orderly growth, but the increment was unable to shrink the amount of real estate hedge; as for short-term needs of the automotive, appliance, machinery manufacturing, and other difficult highlights. Rigid social needs of the times of low stocks and only season demand will lift the substance (such as May Day started in northern intensive period), must decrease demand for off-season (the rainy south). 2015 but the overall decline in the stock market has reflected the seasonal characteristics, individual characteristics of short season is expected in 2016 will be more obvious.

In addition, the 2015 exports of about 110 million tons of steel ,, but the second half of the domestic steel product anti-dumping and countervailing duty investigations exports face an increase, while exports of most Chinese steel mills in Korea and Southeast Asia, the Middle East now account for a relatively small, so in accordance with the current relevant national economy Situation in 2016 exports were a major breakthrough difficult than the increase.

2, the supply side began to dominate the market.

Supply-side reforms to defuse the capacity of the primary. From a policy perspective and debt criteria set out environmental standards, environmental standards forcing some companies out of the market and production capacity; market mechanisms affect the level of corporate profits and losses from the enterprise short-term financing and medium-term financing capacity starting capacity, eliminate a number of low value-added production capacity of zombie companies. Therefore, the supply is expected to reduce the tendency is more obvious, therefore, relatively few years ago the state of increased supply, reduce supply in line with market prices rebound rhythm, laying the foundation for market prices rebounded, while restricting steel prices continue to fall on the economy.

Supply-side reform will bring the market some enterprises to stop production, limited production themes, cut-off and limit production directly affect market supply, stimulate price, such as the beginning of April will be a greater impact Tangshan Park, prices rebounded on the market may have short-term supply speculation themes. Due to demand return of the seasonal market, so cut and limit production to be combined with social themes stock market and the actual demand for overall judgment of rhythm and rebound.

Therefore, the state of the market supply and demand indicates that the steel bottom of the shock line with market rules, so to see the market rebound power supply decline, dropping the price to see the mill operating rates and demand for off-season.