Steel market ‘pulled up by violence’

Steel city presents again “violent pull up”. The main reason is the iron and steel city “Tangshan environmental protection policy strict implementation” brings the iron and steel output substantial decline of the strong expectation landing. Since February 23 start Tangshan iron and steel enterprise as well as engineering like black iron steel pipe carry out depth reduction management journal system. The Tangshan as “new method” to reduce emissions, its main purpose is to control steel production, and the comprehensive control of atmospheric pollution Tangshan march crucial month plan of publishing and implementation, are also more clearly define the target control of Tangshan iron and steel production. The closure of the seven 450 blast furnaces required in the document is expected to reduce molten iron production by 11,500 tons/day. This is just the tip of the iceberg. If strictly implemented, Tangshan’s overall 45 percent reduction target for this year, which is rumored by the market, could affect Tangshan’s steel production by 50 million tons. It is already more than a third of Tangshan’s steel output of steel pipe for sale. At the same time, Inner Mongolia stopped approving new steel and ferroalloy capacity this year, which further convinced the market of the country’s determination to significantly reduce steel smelting capacity.

Essence two is during the “14th Five-Year Plan”, local governments plan in advance the implementation of key projects, especially the recent release of major policies or plans at the national level, so that the market has strong expectations for downstream demand of Hot Rolled Square Steel Tube. Recently The State Council issued a number of major policies: the implementation of these major policies or plans will further accelerate the speed of the relevant infrastructure construction projects, so as to significantly drive the demand of the domestic steel market, further enhance the domestic steel market.

The third reason is that coke has been reduced for two rounds, and the iron ore market has experienced obvious high volatility. The strength of the cost support of round steel tube for sale has begun to weaken, and the domestic steel market has gradually shifted from cost support to the game between supply and demand. Steel production substantial decline and strong downstream demand are expected to stimulate the steel market to reproduce the “violence” market, but it is worth noting that in the short term, strong demand for steel pipe is expected to fall, there is still uncertainty, need to prevent high risk.