Growth rate of steel production

Steel mill production growth slowed, still in expansionary territory
At the beginning of June, the iron and steel industry had a strict production limit policy for steel pipe for sale. In this month, as the work of maintaining supply and price stability of iron ore and other bulk commodities continued to advance, the expectation of steel production reduction was also loosened, and the actual assessment period was shortened, and the idea of leveling control was the main idea. Steel mill production continued to rise until the end of the month in some areas due to policy factors temporarily suspended production limits. Overall, steel production continued to rise in June. The production index fell 0.7 percentage points from the previous month to 50.7 percent, remaining in expansionary territory.

By the end of the day, some areas began to stop limiting production of Hot Rolled Round Steel Pipe, coupled with poor downstream demand. Many steel mills take the opportunity to overhaul the blast furnace. Steel production is expected to have fallen slightly from the previous month, but much less than the fall in demand. Market price shock operation, the whole month closed up slightly In June, the steel market continued to maintain the pattern of oversupply, the gap between supply and demand of hot dipped galvanized steel pipe was widening, and the demand for price support was weakened. However, the expected speculation factor of the production limit within the month supported the price. Under the joint action of the two factors, the steel price fluctuated. In the first half of the month, under the influence of the expected production limit hype, steel prices since the end of May bottomed out; Mid-month production limits are expected to fall short and monetary expectations to tighten, coupled with the off-season downstream demand tightening, supply and demand contradictions gradually increase. Affected by this, the second half of the steel price all the way down. From the whole month trend, the end of the steel market prices at the beginning of a small rise.

The growth rate of raw material prices has dropped significantly, and the cost pressure of enterprises is still there. In the first half of June, driven by monetary easing policies in major countries, raw material prices in the hollow section manufacturers rose rapidly. Take iron ore as an example, the iron ore price stopped falling and rose in early June. On June 15, the 62% iron ore index peaked at $222.35 / ton, which was more than 20% higher than the lowest point at the end of May, significantly higher than the steel price. Raw material prices such as coke and scrap are also rising due to tight supply.