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Frbiz Reports Steel Overcapacity Is Still Outstanding

By: frbiz

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From the development trend, real estate, automobile, agricultural machinery, engineering machinery, part of the downstream steel demand will continue to recover, particularly in fixed-asset investment is still at this stage a major recovery in steel demand pulling power

Steel production from the point of view, as China's economy stabilized recovery to accelerate the growth of industrial production, steel production has also shown a sustained rebound in the more obvious trend. 1-11 months of China's total production of steel 628.3305 million tons, an increase of 17.4%, lower than in the first half increased by 11.7 percentage points. According to "The steel industry restructuring and revitalization of planning" in the Control Objectives for 2009 crude steel production (4.6 million tons), 1-November crude steel production has exceeded industry regulatory objectives, the problem of excess production capacity is still more outstanding.

Steel demand from the downstream perspective, the domestic industrial economy and the major industries continue to pick up, driving steel consumption demand recovery, especially in heavy industry, light industry growth rate is higher than 1-November year on year growth of heavy industry was 10.7%, lower than light higher than the 1.4 percentage points to consumer demand for steel have a greater stimulus. In addition, as the world economy has shown signs of improvement, the international steel market and an increase in demand, China's steel exports slightly. 1-11 months China's exports of steel 21.26 million tons, although the decrease was still up 62.1% year on year, but the decline was 3.3 percentage points than the first half narrowed. It is noteworthy that the current domestic economic growth remained at a relatively low level, the international steel pick-up in consumer demand still time, steel and consumer demand is not yet a solid foundation for recovery.

From the view of the operational features of steel prices, following the financial crisis led to a substantial decrease in domestic steel prices, steel prices in 2009 was basically at the low operating status, and two have been a more obvious fluctuations. The first wave occurred in the year, mainly due to decline in inventory levels, and are subject to the state's industrial revitalization plan to stimulate positive. Early in February once the domestic composite steel price index rebounded to 109.26 points, but because of demand caused by inadequate support falling steel prices again until it bottomed out in mid-April to stabilize. The second round of the fluctuations in prices occurred in the three quarters of reasons: First, due to the gradual effects of macroeconomic policies appear, the downstream consumption of steel industry heads into its peak season of production, especially in the real estate market continues to pick up, greatly boosting the demand for construction steel. Second, raw material prices lead to costs of production. Tie Jingfen domestic iron ore spot ore imports, pig iron, steel scrap rose significantly, coking coal, metallurgical coke prices has increased, the cost of the enhanced role of price support. Third, the general steel market outlook is expected to improve, have raised ex-factory price. However, for several consecutive monthly release of large numbers, resulting in iron and steel products increased inventory levels of society, some products, excess capacity is more prominent contradictions and, therefore, composite steel price index reached 116.32 points in August after another fell to 10 in mid-100 .06 points after a slow callback.

From the steel industry development trend, real estate, automobile, agricultural machinery, engineering machinery, part of the downstream steel demand will continue to recover, particularly in fixed-asset investment is still at this stage a major recovery in steel demand pulling power. Although the 2009 growth rate of fixed asset investment in the steel industry has been relatively low, will help ease the overcapacity contradiction, but because of short-term surplus of China's steel production capacity is difficult to fundamentally reverse the contradictions, the global economy has not yet completely free from financial crisis are still in trouble, and social inventory a relatively high level and other factors, the domestic steel prices in the near future will be mainly low volatility. Top priority is to accelerate the pace of eliminating backward production capacity, increase energy-saving emission reduction efforts and actively promote the iron and steel enterprise mergers and reorganizations, enhance the international competitiveness of China's steel industry and to further enhance the ability to control international resources.

Article Source: http://depositarticles.com/

I am a professional editor from China Suppliers, and my work is to promote a free online trade platform. www.frbiz.com/ contain a great deal of information about disposable table cover,frozen fish fillet,stainless steel balusters, welcome to visit!

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