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The steel market is unstable, and how much will the steel price decrease?

About invest shares of PPP project, the investment in the half of 2016 increases quickly. Besides, the data of diggers surpass the expection, and capital construction will be continuous in 2017.

The analysis are as follows.

Firstly, the prices of staple commodities rise and the actual expenses surpass the budget.

Compared to last year’s budget, the actual expense increase obviously, so the financial pressure is great.

It is said that some construction team have the holiday very early because of the lack of money, and some priority projects delay. It will be continue when the funds are available next year, which means that the market demand will not be turnaround at the end of year.

Secondly, the pressure of asset quality in downstreams becomes greater, and banks start to recover loans to defend the risk.

Due to the depening of the supply-side structural reform, the staple commodities’ prices surge, including the steel. So some banks recover loans to reduce bad loans. Therefore, some steel factories face great fund pressure at the end of year.

Thirdly, in November, the new credit surpass the expect, and it estimates that the credit will steel price decrease in January and February.

In December, the new loan is about 7 hundred billion, and the YoY growth rate of M2 decreases continuously.

Fourthly, interbank rate increases and the fund pressures turn obviously.

Fifthly, the number of mat endowment business decrease and limit the end demand.

Overally, November and January are the period of slack sales of traditional steel, together with the reimbursement pressure, the financial strain will influence the trade. And the steel market’s pressure depend on the supplying and demanding game and the financial strain’s degree. It estimates that the steel price decrease around the spring festival.


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By |1月 4th, 2017|Categories: Industry Info|Tags: , , |0 Comments

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