Steel Demand is not Growing Accordingly, though steel products manufacturers’ inventory increased

In fact, steel demand is not growing so much accordingly. The steel profile, steel plate export, steel pipe export fell a lot more than 20% than the same time last year. Since August 2016, Steel pipes, plates, profiles export have already declined for the 9 consecutive month for single month. At the same time, these steel products manufacturers’ inventory increased, 12.76 million tons for last year, and 14.43 million by the end of March this year.

Iron and steel production increased with iron and steel price

Iron ore inventory at port continue to increase since December 2016. The data shows the port inventory reached 133.6 million, a new record. The domestic iron and steel production increased along with iron and steel price rising. From January and March, the domestic iron and steel production was 2.98 billion tons, rose by 15.9% year on year.

From the beginning of 2017, the steel products manufacturers profit has been maintained at a high level, profit of steel plate manufacturer, steel line pipe manufacturer and steel profile manufacturer average is about 1000 CNY / ton. The steel demand still keep relatively stable, the infrastructure will also need kinds of steel products, such as steel plate, steel pipe fitting, steel bar ect.

Steel products prices will fluctuate in a reasonable range

Due to reducing capacity policy, lots of steel product manufacturers like steel plate manufacturer, steel line pipe manufacturer, steel profile manufacturer shut down. But it will not affect the steel products supply, such as carbon steel plate, API steel plate, steel pipe fittings ect. Iron and steel manufacturers with long production line / high technology and the electric furnace can meet market demand by increasing production. Wu Jingjing, the senior analysis, remind that lots of steel products manufacturers showed high enthusiasm for manufacturing more products, and it is a hard trend to increase the production, so steel product price will fluctuate in a reasonable range.

Steel plate manufacturer reproduction speed up.

According to analyst, the steel plate market demand changes in new order and cost changes in purchase price index get significantly better, such as carbon steel plate. It showed positive factors of steel plate market gathering. The index showed that the reproduction of steel plate manufacture was accelerating. In February, the steel industry production index continuously rose three times to 49.5%, 3.9% higher than last month. The purchasing activities related to production appeared obvious expansion trend. Purchasing volume index increased 5.5% to 50.4% in the month. It returned back to the line more than 50% after 15 months, reached the top point since November 2014. The import index of raw material was 52.6%, up 0.9% from last month. The raw material storage index rose to 51.1%, the highest point since February 2015.

From the actual situation of steel plate production, the loss of steel plate manufacture had been reduced recently, but most of steel plate manufacturer still in loss status. Industry funds remained tight. In addition, the current material market keep strong pattern.

The steel market cost support enhanced.

At present, the cost support of steel plate market clearly enhanced. In February, the steel plate purchase price index continued to rebound, and sharp rose 11.1% to 49.9%, reached the top price since January. Imported ore and steel billet price had strong growth after the Spring Festival , and imported ore price reached $51.2 per ton. It hit a new high of nearly four months on February 20.

The steel products demand will be the key for final trend of steel plate market

According to the related index report, the current steel plate market was under effect of “two low”, the low yield and low storage, and support increased at the policy level, it had formed a strong vibration pattern in short time. For the latter steel plate market, the steel products demand will be the key to determine the final trend of steel market. The market supply pressure was gradually highlighted.