All Metal Cost Rised Everyday,when Will Go Down?

- Aug 09, 2017-

Up to August, the hot weather does not affect the hong kong-listed hot in July after a wave of off-season pull up sharply, steel price seems still no sign of peaking, the price of steel in the beginning of August futures and raw material prices continue to push up, pull up sharply so the question comes, what holds up steel prices in the pull up should have weak season last?The pull up in the "golden nine silver ten" sustainable?The author will through the following several aspects to illustrate this point.

A, high steel prices continue to go

Since 2016, shandong steel prices rising into the interval, though I have repeatedly during, but overall price is still in a rising trend.So what are the cause of prices continue to pull up, then, in the second half of the market can be sustained?

Second, the administrative overweight, in the second half of the environmental protection pressure increases

Since July 7, the environmental protection inspection is started for the beijing-tianjin-hebei "2 + 26" city and surrounding areas of 7 rounds to strengthen supervision work.Referred to as "the most massive operation on environment BaoHuShi" of beijing-tianjin-hebei and surrounding areas to strengthen the supervision for the control of air pollution has reached the age of 3 months, 3 months, 28 inspection were examined 32408 enterprises (units), including 20602 environmental problems existing in enterprises, problems rate of 63.6%, show the pressure of environmental protection.

In August, the country will once again send "DeTiaoGang" special spot inspection.

Three steel mill, steel inventories sharply to reduce inventory inventory pressure is small

From 2016 to 2017, the leading building materials in shandong steel mills remain the status of inventory, which in August 2017 and low for nearly five years, compared with the same period in 2016 nearly 60000 tons of inventory, less so in shandong building materials steel inventory pressure drop could even say that the current steel is in a state of relative shortage of inventory, which makes the steel mills can be unscrupulous rising steel prices, steel prices led to years easy up to down.

Some people would say steel inventories, market prices will certainly pull up?Factors that affect the market price and market inventory and downstream demand?

Four, the market continued to reduce inventory

After the Spring Festival in 2017, the stock market opened sharply reduce mode, in jinan market, for example, from the start of the nearly 120000 tons, has been reduced to the market at present only the amount of nearly 20000 tons.

The reason for this reduction in stock market mainly summed up in two points:

A steel mill in inventory to the market continued to reduce inventory in reducing;

Second, due to steel prices continue to rise, lead to market a fear of heights mood gradually thick, merchants stock up enthusiasm is not high;

Three because prices continue to pull up downstream pick costs continue to increase, the downstream pressure increase, not a lot of procurement, stock up.

Comprehensive the above reasons, the absence of significant changes in demand, steel inventory and stock market continued to decline, reducing supply end, under the condition of reduced demand is not much, prices rose become inevitable.

Five, the summary

Comprehensive the above views, the steel price rise is mainly due to environmental protection, steel mills, market inventory double drop, steel mills to master say, can say every time periodically push up, always steel mills to start first.

Maybe a lot of people think the price is high, in fear of high emotion, you will feel that steel prices fell, but the beginning of 2017 to the present, the price is in the state of everyone has always been a fear of heights, along the line, though I have repeatedly, but on the whole is upside, especially in the low season prices, steel prices hit a record high this year, again it has added confidence in the market.

View the current status of hong kong-listed not in 2016 years before the point of view, because the steel price is in the down channel before 2016, in the down channel at any time during the process of price rise is likely to be in "holes", so afraid of heights is inevitable.But starting in 2016 to the current steel prices is in a rising channel, under the rising channel, price pull up belongs to the norm, so in this case the businessman should not be afraid of heights, but should adapt.I said so, of course, is not representative I blindly optimistic, blind bullish and bearish blindly is not mature understanding of the market.

Finally, the author thinks that, in the second half of the market is still likely to rise in the channel, in this case you should do more band, rational view of the market.