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The steel market may rebound slightly due to shock in July

In the overall downturn of the market, many enterprises are also adjusting their subsequent business strategies.

“In the face of this round of brutal market competition, we must firmly grasp the work of variety optimization and improvement.” Liu Jianrong, Secretary of the Party committee and chairman of Xingang group, said during a survey in the coil factory in early July that a new round of market competition has arrived. In the end, who can survive is better than who has better quality brands, more flexible response methods and stronger profitability. The business strategy and cost control of the company in the second half of the year should be significantly adjusted, and the key work such as variety and cost should be done well and carefully.

Northwest United Steel held a board meeting on July 3, suggesting that all steel enterprises in the region formulate production restriction plans and earnestly implement the production reduction plan. At present, the shareholder steel enterprise of northwest United Steel has a production capacity of nearly 70million tons. All member units plan to take the lead in orderly limiting production by 10%-30%, work from the supply side, adhere to the principle of no production without orders, and play a positive role in maintaining the market.

Zhao Liang told the 21st Century Business Herald that under the current situation of large-scale losses in the industry, all trading links are waiting for the market to improve and reduce the inventory of products and intermediates as soon as possible, while looking for centralized and stable downstream trading customers, so as to maintain the normal operation of capital flow.

For the future market of the steel market, the industry holds a cautious and optimistic attitude.

According to Wang Guoqing’s analysis, the downward pressure on the global economy slowed down slightly in June, but the inflationary pressure continued to rise, monetary tightening policies in various countries continued to be introduced, and the impact and inhibition of the Fed’s interest rate hike and the global interest rate hike on bulk commodities were still increasing. However, in terms of the domestic environment, the steady growth policy has been constantly enforced. The issuance of 3.45 trillion yuan of special bonds issued this year has been basically completed by the end of June, which will be conducive to the rapid implementation of infrastructure projects in the second half of the year, provide favorable conditions for the formation of physical workload in the third and fourth quarters, and thus improve the overall expectation of rising steel demand in the second half of the year. According to comprehensive judgment, the domestic steel market will show a shock and slight rebound in July, but it will not see a significant recovery until the traditional peak season of “golden nine and silver ten”.

According to the analysis of the steel logistics professional committee of the China Federation of logistics and purchasing, a considerable number of enterprises have suffered from business crises after the impact of the epidemic, which may have a certain impact on the later credit extension. Therefore, in terms of the investment choice of industries and enterprises, funds will avoid risks in advance, which will also delay the recovery speed of the real economy, and the related steel demand will also rise weakly. Although the manufacturing and construction industries will gradually recover with the continuous implementation of the policy of stabilizing the economic market, there is limited room for steel demand to rebound in the short term. On the whole, the overall market demand in July continued to be weak, the production of steel mills remained low, and the prices of steel and raw materials fluctuated at a low level. The market demand may be released faster after September.

Post time: Jul-13-2022

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