The supply and demand situation will obviously change and the steel price will remain strong.

As we have previously judged, the demand for construction steel in July is not weak. The progress of the construction of affordable housing has accelerated, and the Ministry of Industry and Information Technology has raised the goal of eliminating backward production capacity and the recent restrictions on electricity in parts of Zhejiang and Jiangsu, and the rebar prices will remain strong. In the third quarter, there was no seasonal downturn in steel demand. The spot and futures transaction prices all stabilized and strengthened, and the total social inventories fell steadily. From the July price policy issued by major steel mills, the price of the snails ex-factory Basically maintained steady. On the supply side, steel mill production continued to remain high. According to the latest statistics from the National Bureau of Statistics, in June, the average daily output of crude steel and steel was 1.998 million tons and 2.624 million tons, respectively, up 2.8% and 6.5% from the previous month, both hitting record highs. The capacity utilization rate of large and medium-sized steel mills was also Continue to maintain above 90%. The Deputy Secretary-General of China Steel Association recently said that from the perspective of steel production in the first half of the year, steel output may exceed 700 million tons this year, which is expected to be about 40 million tons higher than the forecast at the beginning of the year. Under such severe supply pressure, steel prices can still maintain an overall steady increase, especially for long-selling varieties, and it is said that the current market demand is very strong. At present, rebar and wire stocks continue to decline steadily. As of July 8, the steel stocks of 28 major cities in China monitored by the Steel House website showed that the wire rod was 1,386,500 tons, which was 63,100 tons less than last weekend. Steel was 6.173 million tons, a decrease of 64,700 tons from last weekend. The inventory week changes in the previous month were 0.61%, -0.84%, 0.87% and -1.04%, respectively. On the whole, the steel market demand has a clear warming trend compared with the previous ones. The reasons for this, the accelerated construction of affordable housing and the sustained and rapid development of the real estate industry are the main drivers for the continued high demand. In addition, the Ministry of Industry and Information Technology has raised the goal of eliminating backward production capacity and the summer “electricity shortage”, which has also brought a lot of bullish promotion to the recent rebar price. These factors will strongly promote the recent strengthening of steel prices. In terms of the construction of affordable housing, at the end of May, the operating rate of affordable housing in the country was 34%. In the next 30 days, 2 million new affordable housing units were started in the country, and all localities are rushing to complete this task, and even local areas have announced the operating rate. More than 100%. At the end of June, the national security housing operating rate has reached 56.6%. With the funding, policy and land factors resolved, the goal of achieving 10 million affordable housing starts at the end of November is not difficult, which will greatly boost the demand for construction steel. In terms of backward production capacity elimination, the Ministry of Industry and Information Technology raised the target of eliminating backward production capacity in 18 industries by the end of 2011, involving 2,255 enterprises and eliminating 32.1 million tons / 27.9 million tons of ironmaking / steelmaking capacity, and the target set in May ( Compared with the elimination of 26.5 million tons / 26.3 million tons of iron / steel production capacity, the new target has increased by 18% / 6%, which means that the elimination of backward production capacity has become a top priority for policy makers. In addition, the “electricity shortage” factor will also lead to a decline in steel mill output, and supply is expected to decline significantly in the coming months, thereby improving the supply and demand relationship in the construction steel market. Overall, the demand for construction steel in July showed a low-season characteristics, steel mills' inventories remained flat, social inventories continued to decline steadily, the introduction of backward production capacity elimination policies and the progress of affordable housing construction accelerated significantly, making the thread price trend continue to be strong. . Recently, Zhejiang and some parts of Jiangsu have begun to show signs of power cuts. The supply and demand situation is expected to improve further, and rebar prices will remain strong.  

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