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Domestic Economic Stability Is Good Why Steel Prices Do Not Buy?
May 25, 2017

In the last half month of September, the domestic steel price shocks weaken. As of September 13, 2016, the national 20mm three rebar average price of 2548 yuan/ton, this month's cumulative decline in 2.2 average price of 2703 yuan/ton, the cumulative decline of 2.3%; the hot roll average price 2836 yuan/ton, the cumulative decline of 2.4%; cold roll Average price 3485 yuan/ton, total decline 0.9%. Today, the Bureau of Statistics released August economic data, consumption growth, investment growth, stability, industrial economy to good, why the steel market has been sluggish?

The supply-side expansion of the steel industry is higher than expected. August 2016, the national crude steel daily output of 2.212 million tons, the chain growth 2.6%, year-on-year growth of 3%. In the context of continued improvement in efficiency, the production of environmental protection has not inhibited the expansion of the enthusiasm of steel mills, but again released the "Capacity" of the beast, is expected to September steel production will further hit, after all, domestic steel mill profitability still as high as 80%.

The September downstream demand has grown weak. On the one hand, the off-season steel prices continue to pull up, end users to replenish the library, has overdrawn part of the demand. On the other hand, with the growth of commercial housing sales area slowed down, late real estate investment is difficult to have. Meanwhile, the growth of infrastructure investment has also been dragged down by the increasing influence of fiscal and budgetary contradictions.

2016 1-August nationwide sales of commercial housing grew 25.5%, and the growth rate fell 0.9% per cent from January-July, a 4-month slowdown, according to statistics. The new construction area and the capital growth of the enterprise are slowing down continuously, and in the background of the tightening of the housing policy in some key cities, the real estate development is in decline.