Businessmen look forward to end demand release to curb falling steel prices

These days, the steel market for rebar, wire rods, and round steel in the Shanghai market has been falling all over the world. The phenomenon of “opening, falling, intraday decline, and pricelessness” has reappeared; some businesses are reluctant to cut meat at low prices. Goods, I'm afraid the market will fall again, causing greater losses. Caused by the recent decline in the construction market price of steel, one of the main factors is the introduction of a more stringent real estate regulatory policies, directly involving the construction steel market, steel prices fell sharply. On March 4, the price of rebar ** fell from nearly 4,300 yuan/ton before the Spring Festival and fell below the 4,000 yuan/ton mark. The cumulative decline was close to 7%. The Shanghai Steel Exchange's 1310 rebar contract closed at 3905 points, down 101 points, or 2.52%. In addition, traders originally thought that after the Lantern Festival, the demand situation of the downstream terminal industry improved, but the facts did not expect that the downstream terminal demand was not released significantly, and the customer's purchase into the market was rare and the demand was not available. There is no vitality in the market and there is no impetus to stop falling. In addition, the steel mills saw a weak and depressed market and started to lower their prices. This week, some steel mills will reduce the price of rebar and wire rods by 50-100 yuan/ton. The price adjustments of steel mills are "much hopeful and fearful" to steel traders, and are tangled. These many factors have caused the prices of the construction steel market to fall continuously in this period. The pessimistic feelings of the traders are well-founded, and they seem to be somewhat confused about the steel market in March.

At present, steel traders are most concerned about the effective release of terminal demand as soon as possible to ease the contradiction between supply and demand, and to curb the decline in steel prices. Fortunately, the recently held “**” conveys many favorable steel market information, allowing steel traders to panic and dissipate. Instead, they wait and see the mood. After all, businesses have a little expectation of the “**” policy. Some steel traders believe that the introduction of a stringent property market control policy by the government mainly resolutely curbs speculative and investment demand and stabilizes housing prices. In an accountable manner, governments at all levels are required to take measures to prevent the excessive rise of housing prices. ** In the government work report, this year put forward 4.7 million sets of affordable housing in urban areas and 6.3 million new construction starts, and continue to promote the renovation of dilapidated houses in rural areas. Let the people live on the house and meet the house.

From this point of view, the construction of affordable housing in urban areas this year is still a bright spot for the market demand for construction steel, while the country adopts more stringent housing market regulation and control measures to stabilize housing prices, so that the real estate industry will develop healthily, and ultimately will drive the demand for construction steel. In the medium and long term, controlling the property market will benefit the steel market.

However, steel traders are more concerned about the status of “high inventory and low demand” facing the steel market in the later period. They are not optimistic about the short-term market and are not blindly optimistic. This is because current stocks continue to increase, and “de-stocking” requires a process, and a serious excess of production capacity. Once the steel market turns a little better, the price stops falling and stabilises, steel mills are profitable, production capacity is released immediately, and competition increases. Production, which exceeds the market's ability to bear, inventories have risen again, disrupted the balance of supply and demand, and steel prices have returned to shocks and declines. This is a concern for steel traders.

Regarding the trend of the construction steel market in the later period, some operators believe that despite the fact that the ** passed on a lot of favorable information from the steel market, these favorable factors are still difficult to fundamentally change the “high inventory and low demand” of the current steel market. Therefore, before mid-March, the market price of construction steel will not rebound significantly. Before the effective demand of downstream terminals is released, the price will continue to fluctuate and consolidate. It is expected that by the end of March or April, it is expected to stabilize or stabilize. Tend to rise.

Industry insiders pointed out that steel traders should remain clear-headed and rationally handle the relationship between inventory and prices. They should not panic and sell at low prices, nor should they sell goods or market. Under the current market environment, the traditional “stuck for goods” business model will not be effective and there will be no way out.