The balance of steel pipe balance

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The introduction of policies such as reducing crude steel output and maintaining the supply and price of bulk commodities will help curb the sharp rise in the price of imported iron ore and other raw steel fuels, thereby easing the pressure on the production costs of steel pipe manufacturers and stabilizing steel prices.

Since the beginning of this year, iron ore, coke, scrap steel and other raw fuel prices remain high, steel production is greater. In the first half of this year in particular, imported iron ore prices rose much faster than steel prices. Steel mills’ demand for iron ore fell as policies to reduce crude steel output fell in the second half of the year, helping to curb iron ore prices. As of August 13, the price of 62% grade imported iron ore was $161.32 / ton, down $41.64 / ton from the previous month. The second half of the market demand situation, is not optimistic. At present, into the second half of the year, domestic steel demand of round steel pipe has reached the peak and entered the downward phase. From the perspective of macro policy regulation and control, the probability of steel demand intensity will gradually weaken, rather than continue to strengthen. According to statistics, in July this year, from the central government to relevant ministries and commissions and then to local governments, there were 66 intensive measures to stabilize land prices, housing prices and expectations. Among them, the property market control policies continue to increase. In July, a total of 24,000 second-hand houses were sold in Shanghai, down 15% month on month and 16% year on year. Transaction volume reached 81.9 billion yuan, down 13 percent month-on-month and 15 percent year-on-year, marking the lowest transaction volume since the beginning of the year.

The epidemic prevention and control situation in some parts of China is getting stricter, which has a great impact on construction sites. The full implementation of the real-name management of workers will lead to the real estate industry on the strength of steel demand of square steel pipe, which will be further weakened. From the perspective of external demand, due to the adjustment of the steel export tax rebate policy, it is expected that the steel export volume will be significantly reduced in the second half of the year, and the resources turning to the domestic market will increase, which is conducive to further maintain the balance between supply and demand in the domestic steel market.

Steel traders should actively expand new markets
The reduction of China hollow section output will bring the adjustment and optimization of steel variety structure. This is because steel companies to maintain profitability, but also to ensure that output is not higher than the same period last year, then in the variety structure will be more inclined to produce more profitable steel, to maximize efficiency. Therefore, construction steel will be the focus of production reduction, and cold and hot rolled coil plate, plate and other plates will not be affected too much.