Steel market enters winter ahead of schedule

China’s economy grew 6.0% in the third quarter, the slowest pace since the start of the year, according to new data from the national bureau of statistics.This shows that the domestic economy of structural steel pipe is under great downward pressure. In the first nine months of this year, China’s fixed-asset investment grew by 5.4% year-on-year, 0.1 percentage point lower than the previous eight months. Manufacturing investment rose 2.5 per cent year on year, down 0.1 percentage points from the previous eight months.Investment in property development rose 10.5 per cent year on year, unchanged from the previous eight months. This situation can be summarized as follows: infrastructure investment is difficult to grow, manufacturing investment is declining, and real estate remains the status quo, all of which are major contributors to steel demand.

This situation can also led to this year’s peak season steel demand release of rectangular hollow section, less than expected; steel prices due to the lack of demand is also a reasonable thing. With the later cold weather, the construction sites throughout the country from north to south gradually into the shutdown state and steel market demand is expected to continue to reduce. The first is that the heating season is coming and the steel industry will again sound the production limit alarm in order to solve the problem of smog surrounding the city. Steel town of hebei tangshan, for example, has released the improved control scheme for the control of air pollution in the city in October. This will put a limit on market resources.However, before the ministry of ecology and environment has made it clear that the winter heating season production limit strictly prohibited “one-size-fits-all”, therefore, the production limit policy on galvanized steel pipe remains to be seen.

In order to pass on the cost of pressure, traders will naturally increase steel prices, which will be on the later decline in steel prices to form a certain inhibition.In addition, the “governance of the storm” will also restrict steel transport to a certain extent, causing adverse impact on the market trading, which can form a hard support for the steel price rebound. With the spread of pessimism, steel prices are expected to rebound in the short term.The current cost of steel prices also appear loose.At present, coking coal, coke, iron ore and other raw materials prices rise weak.In particular, demand for square steel pipe slowed in the fourth quarter as the steel industry curbed more production. After a sharp rebound earlier, iron ore prices are expected to return to the downward track later. For the steel market, this means that the overall cost of steel moved down, which will form a certain downward drag on the price of steel.