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Is the steel market "cool" after winter?

Today is the "winter" of the twenty-four solar terms of the lunar calendar, and the cold will come as promised, and the trees will begin to wither away. In November, the price of rebar also showed a slight decline. According to the monitoring data of Lange Iron and Steel Cloud Merchant Platform, as of November 7, the average price of tertiary threaded steel (25mm) in ten major cities in China was 4658 yuan per ton, a cumulative decrease of 57 yuan per ton from the end of October. With the advent of winter, will the steel market be "cool"? Will prices continue to fall?

In November, many policies on environmental protection and limited production have been introduced. The action plans for air pollution prevention and control in autumn and winter in Fenwei Plain, Tianjin and Shandong Province have been launched one after another. On November 3, the plan for staggered peak production in the iron and steel industry of Tangshan City in autumn and winter 2018-2019 was deliberated and approved by the municipal government at the 17th executive meeting of the 15th session, requiring all localities to implement it conscientiously. From the above policies, we can see that this year's regulations on production restriction are flexible, and environmental standards (air quality) have become the most important local standards for production restriction. Because the environmental policy of production restriction is not as large as previously expected, leading to a certain degree of impact on spot market confidence, leading to a slight decline in the price of screw steel in November.

But there is no need to be too pessimistic. In the fourth quarter of this year, the steady growth of the country and the work of building up the infrastructure are gradually beginning. From the data of the first three quarters, we can see that 147 fixed assets investment projects have been approved and approved by the National Development and Reform Commission, with a total investment of 697.7 billion yuan. Among them, transportation fixed assets investment completed 2.28 trillion yuan, an increase of 1.4% compared with the same period last year, of which expressway investment completed 702.6 billion yuan, an increase of 12.0% compared with the same period last year. Infrastructure investment will further accelerate and demand for steel will continue to increase. In addition, the recent market in some areas of 28 mm or more of the large-scale screw steel resources have been interrupted, and the large-scale screw steel is used in the new start-up stage of the project, which shows that the current start-up of the new project is still relatively good.

In addition, steel stocks have been kept for 3 weeks to maintain a substantial decline. According to the monitoring data of Langer Iron and Steel Cloud Merchant Platform, as of November 2, the social stock of steel in 29 key cities in China was 8.098 million tons, down 368,000 tons from last week, and down 1.13 million tons for three consecutive weeks. Low inventory has played a good supporting role in steel prices.

Why did the price of rebar continue to decline slightly since November? Will there be a sharp fall in the price of later steel bars?

Wang Guoqing, director of Langer Iron and Steel Research Center, said that the continuous decline of rebar in November was mainly due to the high price caused by the continuous rise in the earlier period, which now belongs to the rational callback. On the other hand, it is also affected by the return of the peak season and the coming of the off-season, which has led to the loss of market confidence. However, at present, the inventory pressure of threaded steel is low, and the late heating season production restriction will have a certain inhibitory effect on the supply. Moreover, the current cost is also increasing. The continuous high price of iron ore and coke, together with the implementation of new national standards on screw steel on November 1, has caused the demand for vanadium and niobium to rise and the price to rise, which has played a supporting role in steel prices. Therefore, the rebar space is limited, and in the late stage, the high pitch is the keynote. (source: Lange steel)
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