Analysis of main influencing factors of steel price trend in 2019

In the first four months of 2019, the cumulative growth rate of real estate development investment and new construction area increased steadily, and both reached the annual high value in April. Among them, from January to April, the accumulative year-on-year growth rate of the China hollow section tube completed reached 11.9%, and the monthly year-on-year data of the real estate development investment completed reached 11.98% in March and April, which was the peak of the year. From January to April, the accumulative year-on-year growth rate of housing newly started area reached a high of 13.1%, and the monthly year-on-year growth rate of housing newly started area reached a high value of 18.06% in March, and decreased slightly to 15.5% in April, maintaining a high overall level.

Driven by the demand in the peak season of gold, silver and silver, the inventory reduction of galvanized steel pipe was relatively smooth, and the spot price in the screw period rose by concussion. From May to November, the accumulative growth rate of real estate development investment declined in all other months except September.In addition to October, the growth rate of new housing starts picked up, other months have declined in succession.In October, the monthly housing starts growth rate reached 23.23%, the highest in the year. In November, it dropped 2.88% from the same month last year, the first negative growth since November 2017. In contrast, spot prices of mild steel tube rose sharply in November, and then turned into a shock decline in December.

The performance of the automobile industry is relatively depressed, production and sales growth rate has been negative year-on-year growth. From January to November, auto production totaled 22.858 million units, down 9.6% year on year, and auto sales totaled 23.11 million units, down 9.1% year on year. The sluggish performance of the auto industry also made the hot coil prices weaker than the thread for most of the year. However, since the second half of the year, the marginal performance of the cold rolled steel pipe has improved, and the year-on-year decline in production and sales has narrowed. From January to June, the year-on-year decline in auto production and sales has decreased by 14.2% and 12.4%, respectively, to within 10% in November.In particular, in November, the auto output increased by 3.8% year on year, which was the first positive monthly output growth since July 2018. This is also an important reason why the overall performance of hot coil price at the end of the year was stronger than that of thread.