According to Xinhua News Agency
On the 9th of this month, the National Bureau of Statistics announced the Consumer Price Index (CPI) for January. The data showed that in January, due to the sharp increase in holiday factors and food prices, domestic CPI rose by 4.5% year-on-year, compared with 4.1% in December last year, which ended the trend of the previous five-month price index continued to decline. The unexpected rise in CPI has once again stranded the long-awaited easing policy and has also exacerbated the pessimism of steel investors.
Prices are high, optimistic expectations encounter Waterloo
Recently, with the improvement of US employment data and the easing of the European debt problem, there has been a long-lost rebound in the external market. Affected by this, the domestic steel industry is also eager to move, and they are expecting domestic policies, especially real estate policies, to loosen. During this period, the central bank asked banks to meet the demand for first-time home loans, and increased the market's expectation of real estate control policies or moderate relaxation. The foreseeable demand for affordable housing also made some enterprises optimistic, and futures steel prices also appeared. Continued rebound.
However, the unexpected CPI data has poured a cold water on this strong optimism: if the price remains high, then suddenly loosening the monetary policy will make the results of the austerity last year burn, and the shadow of inflation once again envelopes the steel market. . Therefore, analysts in the industry believe that under the circumstance that domestic prices have not continued to fall, the overly optimistic expectations will not be realized, but will be repeated due to the continuous decline in steel prices after the Spring Festival last year.
Consumption is difficult to start, steel inventories continue to increase
Around the Spring Festival, affected by market optimism, steel prices fluctuated and climbed under the expectation of RRR cut during the Spring Festival. Affected by this, traders have also accelerated the pace of hoarding steel. According to my steel network statistics, as of the 3rd of this month, the national social stock of rebar was 7,426,800 tons, an increase of 767,400 tons.
After the Spring Festival, due to the delayed construction of the construction industry and the poor sales data of the real estate industry, the downstream steel consumption is difficult to start. In addition, most of the trading companies are worried about the recurrence of steel prices, such as the rapid decline of steel prices after the Spring Festival last year. They have been holding on to the currency, causing more steel mills to flow to the market. The passive increase in steel stocks in the spot market has further affected steel. The price also caused the trend of spot steel prices to deviate.
Steel production is at the bottom of the valley
Therefore, we also see that domestic steel production has remained at a low level under the premise of sluggish consumption. The data shows that the average daily production of crude steel in the country in late January is estimated at 1.673 million tons, which is still at a low level. Such steel output will not bring too much impact to the downstream market, and it is more favorable for the stabilization of steel prices.
Industry analysts believe that under the premise that domestic steel production does not recover quickly, excessively empty steel prices are not enough, because all parties in the market are very rational and cautious, coupled with the current market conditions, domestic steel The factory is also losing more and earning less, and the space for steel prices to continue to fall is also extremely limited.
On the whole, as the downstream demand for steel is not yet open, the performance of the steel market is also cautious, and steel prices have always maintained a narrow range of shocks. Moreover, as steel production is also at a low level, the space for steel prices to continue to fall will be first restrained by industry supply; on the other hand, despite the unexpected increase in CPI in January, the reasons for rising prices are more due to holiday factors, and prices continue. The basis for the rise does not exist, so the market still expects monetary policy to loosen in February and February.
In this way, both the long and short sides of steel are cautious when domestic macroeconomic policies are not yet clear. Analysts believe that in the long run, domestic monetary policy easing is always a high probability event, and the consumption of steel downstream will eventually come along with the gradual warming of the weather. The spring of the steel market will come sooner or later. However, in the short term, it is still too early to predict that steel prices will rise sharply because domestic policies have not been fully defined.