Demand in the peak season and price fluctuations have become the main theme of the recent steel market. According to the latest data released by China Iron and Steel Association, in early June, the comprehensive steel price index was 116.58 points, a year-on-year decrease of 14.27%. Since June, steel prices have continued to decline, and steel prices have dropped to the lowest point in a year and a half.

Some analysts said that the trend of steel prices in June was very unusual. Starting in late June 2011, steel prices began to enter the rising channel. At the end of July, steel prices rushed to the highest point of the year. In 2012, since mid-April, steel prices have been declining. No effective rebound has been seen so far. Beijing Putian Metal Group Co., Ltd. sales staff also said: "Last year this time is going up, but now it is falling again and again, there is no end."

In fact, the downturn in the downstream major steel industry is a major cause of the difficulty in recovering steel prices. In the recent period, the growth rate of investment in fixed assets and real estate development in the country began to fall, including general equipment manufacturing, automobile manufacturing, railway and shipbuilding and other transportation equipment manufacturing, electrical machinery, and electricity, heat production and supply. The use of the steel industry is also slowing down. On the other hand, high inventory has become a burden on the steel industry. At present, steel society stocks in major cities in China are still at a high level compared with the same period of last year.

The sluggish market and sharp decline in sales have severely overdrawn the patience of front-line business personnel. "Pessimism", "wait and see", and "confusion" seem to be insufficient to describe their feelings. A steel trader admits that it is more appropriate to use "numbness" to describe the mentality of people in the industry. Senior executives of Beijing Wanshunfa Electronics Co., Ltd., which is principally engaged in the sales and processing of construction steel products, publicly stated: “The current steel producers have no vitality, and the trade and economic traders have no confidence. The steel market is like a backwater.”

What is even more worrying is that China Steel Association predicts that due to the imbalance of supply and demand in the market, steel prices will hardly increase significantly, and steel prices will continue to post low momentum in the later period.

related news:

Steel prices will rise modestly in the third quarter on the 16th. Analysts said that if the impact of the major impact of the European debt crisis on the market is not taken into account, some policies that are brewing and short-term steady growth are being forced to be introduced quickly. The market should be shocking bottoming and bottoming in June and will recover moderately in the third quarter.

According to the analysis, the reason for making the above judgment is based on the following reasons: The real estate prosperity index is a leading indicator of the steel price index and it is still declining. However, the real estate control policies in various regions have been loosened, market transactions have been enlarged, and there has been further relaxation in the later period; currency growth has rebounded after the second bottom, which has led to an improvement in the currency environment; while stocks are relatively high, they are also declining. The steel mills have actually been cutting output; iron ore prices are still tightly balanced, and the price of around US$130/ton appears to be the bottom line for mills.

"Don't limit space to a certain point in time. This year's infrastructure investment arrangement is 400 billion yuan, but at present, even if it does not reach 500 billion yuan, it is accelerating." Analysts use "fill in the air", "heaven", and "burrow" "To the sea" to describe the future of China's huge demand for steel.

“Filling in the blank” means that China has a huge space for industrialization and urbanization. Each place leaves a huge space for future development, such as the construction of high-tech zones and railway construction in various regions. Although the speed is slowing down, “filling in the air” on the ground continues. When it comes to "nature," the analysis uses the "Shenzhou No. 9" that has just been launched as an example to illustrate the huge demand for aerospace science and technology from civilians to steel; "digging holes" refers to the construction of subways all over the country. “Haihai” means that the demand for offshore steel such as oil drilling platforms and the “Nanlong” is on the rise.

In his view, from the long-term perspective of 5-10 years, the national conditions have determined that China's steel market still has more room. In the short period of 3-5 years, objective factors such as specific development stages, population structure, and international markets determine that the steel market will experience a difficult process.

"Long-term market prices, short-term is the "primary price" (price changes with the macro-control policy)." Analysis said that economic growth continues to decline, the steel market will not have a big bull market. At present, the rate of economic decline has exceeded expectations, and this trend in turn will force policies to accelerate and increase the introduction, so that the economy will rebound, and the steel market's phased interests are accumulating.