Steel demand declines

On the one hand, the price of raw materials such as imported iron ore has fallen, the cost of steel production has moved down, and the power to support cold rolled steel pipe price has weakened. According to statistics, as of November 12, 62% grade imported iron ore price index reached 89.8 US dollars/ton, down 143.3 US dollars/ton from the year’s high of 233.1 US dollars/ton on May 12 this year. Recently, the price of coal, coke and scrap steel also fell one after another after rushing high. At present, the coke market is weak, and the third round of reduction of 200 yuan/ton has landed, and the coke price has fallen by 600 yuan/ton. Due to the continuous decline in the price of raw fuel, the production cost of steel enterprises has fallen, and the cost line has led to the decline in steel prices. From the recent introduction of steel prices policy is not difficult to see, steel enterprises basically to reduce prices.

On the other hand, the effective demand of downstream terminals decreases. Nowadays, the real estate industry continues to be depressed. According to industry statistics, in October, the overall housing transaction area in 16 major cities fell 7.4% from the previous month and 24.6% year-on-year. In addition, the real estate tax reform pilot also caused fluctuations in the real estate industry as well as round steel pipe industry. Recently, the real estate tax reform pilot work was released, and some cities have carried out pilot work. After the news came out, real estate developers reacted strongly and dared not take land rashly, resulting in some areas of land auction; Second-hand housing market transactions light, prices fell. The infrastructure sector is also suffering from weaker investment demand, leading to the less needs for hot rolled steel pipe, providing less support to the economy than expected. Statistics show that the latest week of rebar daily average volume has been declining for 4 consecutive weeks, a year-on-year decline of more than 20%. The current real estate, infrastructure, steel demand intensity will continue to weaken.

Manufacturing production and sales conditions are also poor, “steel demand” intensity is also weakening. China’s automobile production and sales reached 2.33 million and 2.333 million vehicles in October, down 8.8% and 9.4% year on year respectively, according to the China Association of Automobile Manufacturers. In the first 10 months, China’s automobile production and sales reached 20.587 million and 20.97 million respectively, up 5.4% and 6.4% year-on-year, but the growth rate continued to fall compared with the first 9 months. According to statistics from the China Construction Machinery Industry Association, 25 major steel pipe manufacturers sold 18,964 excavators in October, down 30.6 percent year-on-year. Sales of various types of loaders 9276 units, down 12.3%.