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China’s Steel price will probably drive prices up in 2016

China’s Steel price will probably drive prices up in 2016
Issue Time:2016-01-27

Low price of steel products still remaining prestige in the new year.

Recalling the 2015 Chinese steel market dropped so sharply, for three main reasons: First, the slow global economic recovery, China's economic growth continued to drop, relatively weak demand overall steel consumption; the second is the expansion of domestic steel companies to cut prices, intense competition to protect market share market supply heavy pressure; Third smelting raw material prices plummeted at home and abroad, the collapse of steel prices cost support, and to provide room for price cuts. In addition, the Federal Reserve to tighten monetary policy to the United States caused by reflux of capital and speculative capital the waves, but also adds a dynamic steel prices fell.

2016 the whole steel market has a great probability to rise in Price 

From domestic demands, Decision-making department has developed and continues to introduce many steady growth initiatives, including investment play the key role, densely written reply to a subordinate body of the national economy short investment project, etc.

From exporting demands,The mainstream view is that in 2016 the US economy will continue picking up.Economic recovery in developed countries towards Europe, especially the strong real estate and auto sales, help to increase international market demand for steel. In the new year, the yuan and the US dollar decoupling, moderate depreciation against a basket of currencies, China's steel exports will also increase competitiveness. Is expected in the new year, China's steel export demand remains strong, the total exports of not less than 80 million tons, there may still be more than tons of scale.

From source supply,2015 domestic steel companies to cut prices as sales, as a main means of competition, to defend market share, even squeeze additional market share. So, although the national steel demand down, but steel production increased rather than decreased, the market supply of resources increasingly heavy pressure. On the other hand, supply continued downward pressure on the price of steel, some companies even lower than the cost line, the steel industry profits thus declined significantly, a serious loss, naturally makes 2016 China's steel enterprises increase price space narrowing, Forced steel companies cut production . Moreover, in the new year, the implementation of economic decision-making layer is disposed tasks required to resolve excess capacity, clearing "zombie companies" to reduce the loss of subsidies, how much resources will suppress excess steel supply pressure, which makes the oversupply situation in the steel market trends slow

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