Steel demand is everything

Date:2016-4-18 15:22

On the domestic steel prices fell after a week after. We mentioned in the previous judgment: we keep good anticipation of hong kong-listed, fundamentals to which is in turn for the better. One reason: industrial chain upstream raw materials and traders to inventory very thorough, create the good conditions for steel prices rebound. From Lange statistical data as you can see, the Spring Festival last year when inventory at around 1.1 million, tangshan billet and billet inventory is less than 600000 Spring Festival this year, nearly half. And the society as a whole of steel stock a third lower than the same period last year. Reason # 2: the peripheral environment can be positive, since this year the policy surface continuously, overweight and credit of mass on the real estate recovery, infrastructure, with three in April of seasonal demand recovery, this kind of structure in the short term can continue. Reason # 3: steel mills ex-factory price increases sharply, will be to pull up the direct cause of this time.


Decide this time steel prices after rose is rebound or inversion, the key is to demand the release of degree. We all know that the real reversals, must be established on the basis of the improvement of relations between supply and demand, so we focus our attention on demand. Take a look at the future a period of time of steel downstream demand is to deliver? Or disappointed?


Start with 40% steel demand of the real estate industry. From the policy of good last year, real estate sales this year appears contrarian, north to guangzhou, after the Spring Festival and other first-tier cities there prices soaring, clinch a deal at the phenomenon, cattle are run to sell no reservation number, hot. From past experience, rising from sales rebound to developers of land purchase area, general construction industry conduction effect of about 3-6 months time. Coupled with 1 to 2 months, January and February this year year-on-year growth of 3.0%, in the name of the national real estate development investment growth 2% higher than that of last year. Real estate development enterprise land acquisition area fell 19.4% year on year, a drop than narrowed 12.3% for all of last year. Landing rhythm than expected this year real estate policy, cut the city down payment for purchasing policy, the deed tax and business tax relief policies, including around with the household registration system reform implemented in system, and clear around 2016 and much starker choices-and graver consequences-in affordable housing plan. We believe that the real estate industry is expected to be bottoming out within short cycle. But the continuity and strength still hold reservations about, reason is that the current hot phenomenon based on a line and part of the second-tier cities housing bubble, must clearly this year is still the main task of the real estate to inventory, so the future real estate investment growth rebounded but difficult to trend better. In Lange steel mesh spring conference, experts also proposed that pulled by policy excessive consumption of real estate industry, the effect is better, the more serious the possible future problems. That is to say, now with many preferential policies pull inventory, encourage consumption, advance the future demand was overdrawn, so in the future have no preferential policies, no loose environment, there is no demand, so the industry and what to do. The idea is worth us thinking. Therefore, on the whole, we believe that real estate developers to start construction in the future for a period of time the land will maintain a cautious attitude, the whole real estate industry cycle rally but hard to say better trend.


Infrastructure is worthy of we are looking forward to. According to conventional wisdom, although the infrastructure investment growth fell, but with the rapid growth of new projects planned total investment, infrastructure investment this year is expected to become one of the main power of investment in fixed assets. The past few years we didn't less common a phenomenon is the project approval, funding is not low, but these are not converted into practical engineering construction order of pick up. And open data can be seen from this year, this year most of the infrastructure construction is entered a substantive stage, whether the money is for approval of the project or new projects this year, the ultimate goal is to rush to work, that is the real demand for steel. Lange steel research center statistics, according to data from the railway investment of 800 billion yuan in 2016, plans to start 45 project, steel demand is expected to pull the rail directly with about 27 million tons. Highway investment of 1.65 trillion yuan, about directly pull the highway about 45 million tons of steel demand. Overall, large-scale lending this year, more actively promote financing ways, such as the PPP, source of funds for infrastructure provides more security. As urban underground pipe rack, along all the way, such as the detailed planning of urban construction, a large number of irrigation and water conservancy infrastructure, municipal gardens for approval and to accelerate the construction, infrastructure class more needs of steel.

Remove infrastructure, real estate, the steel producer, let's look at an industry's performance this year. From related industries production data, 2 month before the national shipbuilding completed 4.2 million deadweight tons, fell 24.4% year on year. Undertake new ship orders 950000 deadweight tons, fell 75.1% year on year. Monthly production of 4.126 million cars, the first two slightly lower than the same period last year. The end of February with ship orders lower than at the end of 2015 to 3.3%. Manufacturing PMI index of 49.0 in February, for seven consecutive months less than from the line, and a new low since December 2011. Manufacturing PMI index is lower than the months from line has more than 2008 years in a row during the financial crisis, according to manufacturing downward pressure is still very serious. So we think that the tendency of plank varieties corresponding related downstream industries is not optimistic, but the seasonal production and sale of vehicle purchase tax breaks, household appliances improving staggered positive factors, such as plate demand there will be a phased better, but still suggest to maintain low inventory operation.

TypeInfo: Industry news

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