“Steel House website 2010 steel market situation seminar†was held in Shanghai from October 31st to November 1st. At the meeting, Wu Zhiwen, general manager of the Steel House website, stated that the trend of the depreciation of the US dollar will not change in 2010, and the global excess liquidity situation will continue. The domestic steel market “high output, high inventory, low price†will become 2010. The domestic market is normal. In the first half of 2010, the overall “digested stocks and oscillatory operations†were the main ones. It is expected that there will be a round of upswing around May and the overall performance is better than this year.
Wu Wenzhi stated that at the end of 2009, urban fixed asset investment projects under construction will be sufficient to drive China's economy to continue to improve in 2010.
The improvement of the international economic environment in 2010 will drive the recovery of China’s foreign trade exports in 2010. Both direct and indirect exports of steel products will be better than in 2009. In 2009, China's crude steel demand was around 530 million tons, and in 2010 it is expected to be between 580 million and 600 million tons, an increase of 10% to 12% from 2009. The overcapacity situation in the domestic market will be eased. If China's crude steel production can be controlled at 600-620 million tons, regardless of the impact of inventory resources in 2009, the supply and demand relationship in the domestic market in 2010 will be expected to be basically balanced.
“The domestic steel mills will not easily reduce production voluntarily, and the high-production situation will be maintained for a long period of time.†According to Wu’s article, it is unlikely that domestic steel mills will reduce production from the fourth quarter of 2009 to the first quarter of 2010. In October, domestic iron and steel enterprises still have low profits. According to statistics, the pig iron manufacturing cost of major large and medium-sized iron and steel enterprises in August 2009 was only RMB 26/t higher than that in April, and the manufacturing cost has not changed much. In October, the average price of ordinary hot-rolled steel in 28 major domestic markets was 100 yuan/ton higher than that in April. Taking into account the loss of 1.5 billion yuan from 71 key steel manufacturing enterprises in April 2009, domestic iron and steel enterprises can still maintain low profit operating status in October. Iron and steel companies will continue to increase production to dilute fixed costs and reduce costs. Domestic steel mills will continue to produce in volume in November. In mid-October, the domestic steel market price rebounded, reinforcing the bottom expectation of the market for steel market prices, and the possibility of a further reduction in steel factory prices is unlikely. In December, domestic steel mills will continue to produce heavy metals in order to complete the annual plan targets. Even before January 2010, domestic steel mills are chasing “opener†and steel production will remain at a high level.
“Unless the domestic steel market price can fall below the low price formed in April 2009, domestic steel production will remain high, and the oversupply of supply exceeds demand will inevitably increase.†Wu Wenzhi said, but taking into account the domestic market funds Sufficient supply, low financing costs, coupled with good external environment, circulation companies dare to hoard stocks to be up.
Wu Wenzhi stated that at the end of 2009, urban fixed asset investment projects under construction will be sufficient to drive China's economy to continue to improve in 2010.
The improvement of the international economic environment in 2010 will drive the recovery of China’s foreign trade exports in 2010. Both direct and indirect exports of steel products will be better than in 2009. In 2009, China's crude steel demand was around 530 million tons, and in 2010 it is expected to be between 580 million and 600 million tons, an increase of 10% to 12% from 2009. The overcapacity situation in the domestic market will be eased. If China's crude steel production can be controlled at 600-620 million tons, regardless of the impact of inventory resources in 2009, the supply and demand relationship in the domestic market in 2010 will be expected to be basically balanced.
“The domestic steel mills will not easily reduce production voluntarily, and the high-production situation will be maintained for a long period of time.†According to Wu’s article, it is unlikely that domestic steel mills will reduce production from the fourth quarter of 2009 to the first quarter of 2010. In October, domestic iron and steel enterprises still have low profits. According to statistics, the pig iron manufacturing cost of major large and medium-sized iron and steel enterprises in August 2009 was only RMB 26/t higher than that in April, and the manufacturing cost has not changed much. In October, the average price of ordinary hot-rolled steel in 28 major domestic markets was 100 yuan/ton higher than that in April. Taking into account the loss of 1.5 billion yuan from 71 key steel manufacturing enterprises in April 2009, domestic iron and steel enterprises can still maintain low profit operating status in October. Iron and steel companies will continue to increase production to dilute fixed costs and reduce costs. Domestic steel mills will continue to produce in volume in November. In mid-October, the domestic steel market price rebounded, reinforcing the bottom expectation of the market for steel market prices, and the possibility of a further reduction in steel factory prices is unlikely. In December, domestic steel mills will continue to produce heavy metals in order to complete the annual plan targets. Even before January 2010, domestic steel mills are chasing “opener†and steel production will remain at a high level.
“Unless the domestic steel market price can fall below the low price formed in April 2009, domestic steel production will remain high, and the oversupply of supply exceeds demand will inevitably increase.†Wu Wenzhi said, but taking into account the domestic market funds Sufficient supply, low financing costs, coupled with good external environment, circulation companies dare to hoard stocks to be up.