The overheated real estate market and economic stimulus policies caused inflation expectations to become the government's recent focus on regulation and control, in this context, the Department of Homeland introduced the "19" Land Deal pointing its sword towards the real estate space, while the central bank's series of austerity measures at home and abroad also showed Governments to withdraw the policy clarified. However, the introduction of these control policies does not seem to shake the macroeconomic and real estate close to the steel city of correctional market, combined with strong market demand for the strong increase in costs is expected, the period of the spot price of steel up side by side, and with other parts of the goods and in contrast to the stock market is relatively weak. Break through the block of steel to another record high?
Building demand and export growth stocks turning point
Since the end of last year, due to the weather and the Spring Festival of factors led to demand for domestic steel market bleak situation in the recent signs of gradual change. In mid-March, steel prices have shown a significant rise. March 12 week, MyspiC domestic steel prices index rose 3.22% week chain, in which long products index rose 3.81%, flat materials index was up 2.74%. It is worth mentioning is that the inventory of steel community has finally stopped the pace of growth for 15 consecutive weeks, as of March 12, the nation's major cities in all varieties of steel inventory total 18.3201 million tons, a decline of 1.40%. Five sub-varieties of steel stocks are down chain, in which stocks fell 2.56% wire, rebar inventories fell 0.96%, hot-rolled, cold-rolled, and the board stock drop pericyclic respectively, compared with 1.23%, 2.10% and 1.69%. We believe that the stock declined along with the recovery of steel prices indicate the current demand for iron and steel industry is gradually released downstream, combined with recently published crude steel production, imports and exports, as well as real estate and infrastructure investment in upstream and downstream data, we believe that the future of steel demand will be further release, steel prices are expected to trend upward oscillation.
Steel's optimistic expectations led to February crude steel production capacity to continue to release
According to the National Bureau of Statistics March 11 to data released in February of domestic crude steel output reached 50.357 million tons, an increase of 22.5%. Co-month average daily output of 1.8 million tons, compared with January's 1.68 million tons increased. Based on annual data, in February of this year reach 657 million tons of crude steel production over last year's record high of 567.8 million tons increase of 16%. After the Spring Festival holiday, iron and steel market active than expected, due to relatively loose monetary policy, real estate developers have not encountered liquidity problems, demand is expected to gradually release the optimism, the steel production capacity to continue to release. Although the March crude steel production exceeded market expectations, but the supply is still in the full year within the range of consumption. Total capacity of the steel industry in 2010 mainly consists of two parts, first, in 2009 the original deposition capacity, and second, the net additional production capacity in 2010, but in the country under the action of a series of industrial policy, the new net capacity is limited. According to statistics, in 2009 the domestic steel industry, new capacity for 53.95 million tons in 2010, new capacity will be significantly reduced to 10.48 million tons, total production capacity of 7 billion tons. We believe that the current capacity of the steel industry in a series of mergers and reorganization of the policy to enhance the more limited the growth in demand exceeding supply growth, driving up steel prices Naishi market theme.
January-February a net exporter of crude steel super last year with a net exporter of steel products in March is expected to continue to improve
Customs statistics show that in February China's exports of steel 2.49 million tons, compared with January decreased by 40 million tons, with 59.62 percent increase compared to same period last year. From January to February total exports of 5.38 million tons, an increase of 55.1%. February China imported 110,000 tons of steel more than in January decreased by 21 million tons, increased 4.59% over the same period last year. January-February imported a total of 2.49 million tons, an increase of 27.1%. Before February exported 10,000 tons steel billets. In February import 50,000 tons steel billets, in January compared with an increase of 2 million tons, down 84% from a year earlier. From January to February total of 80,000 tons of imports of steel billets, down 82.1%. During the Spring Festival in February as a time when, together with the Asian region are in need of basic off-season, steel exports drop in anticipated. It is estimated that in February a net exporter of 1.383 million tons of crude steel, 1-volume of net exports of crude steel in February exceeded the year 2009. External demand continued to pick up, the U.S. crude steel production growth of 10 straight weeks, the European demand will rise by 20%. The recovery in exports is expected in the steel under the effect of iron and steel industry supply and demand relationship will be further eased.
Real Estate steel demand the release of new projects
Rebar and wire are widely used in houses, bridges, roads and other civil works construction. As large as highways, railways, bridges, culverts, tunnels, flood control, dams and other public facilities, small storage base housing construction beams, columns, walls, plates, rebar and wire are indispensable structural material. As China's urbanization level of constant depth, infrastructure construction, real estate boom of the strong demand for long products.
Infrastructure construction, 1-February, urban fixed-asset investment 1.3014 trillion yuan, up 26.6% over the same period last year to speed up 0.1 percentage point. Construction and new projects from the situation, 1-February total construction project 92870, an increase of 14174; construction project plans a total investment of 21.2512 trillion yuan, up 29.9%; new projects 18462, down 71; New project started a total investment of 1.0616 trillion yuan, an increase of 42.7%. From the above data we can see that the "structural adjustment" policies of the shadow, the total investment in new projects increased significantly year on year decline in 2009, up from 96% to 43%, but the levels remain too high. The number of new projects is from April 2007 the first time since declined. We believe that investment in infrastructure, despite the decline, but remained stable at a high level, expect the demand will continue to drive rebar.
We know that China's total steel construction steel consumption of around 50%, of which the total real estate construction steel construction steel has more than 60%. With the lagged effects of the real estate area of newly started gradually emerged, construction steel, especially steel rebar and other housing demand will gradually release the second quarter of this year. March 10 National Bureau of Statistics data showed 1-February the amount of 314.4 billion yuan of domestic investment in real estate, an increase of 31.1%, an increase over last year increased 30.1 percentage points compared with 2009 full-year growth rate of investment to upgrade 15 percentage points over the same period last year by 30 percentage points. From January to February new home sales 71.55 million square meters area, an increase of 38.2%, reaching the highest values of the last five years over the same period. National housing starts from January to February the new area of 149 million square meters, up by 37.5%. Continuous introduction of regulation and control policy in the real estate situation, an area of housing sales and new starts are still maintained a good growth rate.
Recalling the second half of 2009, land satirized in King City, "often come up, the new data on a gradual recovery starts, up from negative to positive. The new film lands on the next 3 to 6 months has brought a strong start needs, and with the newly started project step by step into the main construction phase will follow growth in real estate investment. With the March return to work after the construction of the real estate business, we maintain the real estate investment a few months in follow-up data will continue to be a good judge. projected area of newly started The year the data will remain high, real estate, an area of newly started lagging effects of a long show will boost demand for the release of material, making a shortage of long products market situation, and significantly boost steel prices.
Inventory its peak boost market confidence
March 12 week, the country's 26 major cities in the social stock of steel 15-week growth in a row, the first decline. With the launch of new projects, industrial steel stocking the beginning of recovery and expected stock will continue to fall. We believe that the long-term growth stocks fell for the first time after the steel case has a positive meaning, indicates that the downstream demand has started to grow significantly.
In summary, we believe that the future will be in the export recovery in steel prices and real estate construction, infrastructure, driven by the needs of oscillation upstream. From the past few trading days of the rebar futures point of view, the trend is stronger than 1005 contract 1010 contract, showing a much weaker pattern of recent strong, indicating that current demand is improving, while the period of higher prices from the spot in the kinetic energy of the substantive support. In addition, as the main rebar pre-1010 contract from 4375 yuan / ton in phase gradually picked up to 4650 yuan low / ton in the vicinity, and a 60-day moving average support, we believe that the next year prices will be steady with the spot price higher. Oscillation in steel prices up in the context, investors should maintain a long thinking, relying on moving average support to do more Naishi bargain-hunting investment themes.
Cost-shift is not a key factor in strength steel
Shanghai has a strong steel futures pulled completely out of the stock market and other commodities, weak atmosphere. The rapid rise in steel market due to the cost of the move that the long association of iron ore prices expected to rise leading to the main cause of higher steel prices there, but I believe that the rising cost of course, raise the effect of steel The role of the waves, but the most fundamental reason is the relationship between supply and demand in the domestic steel market has changed, supply and demand growth rate of the decline is the improvement of the real drivers of higher prices.
Costs is expected to strongly
Inquiry this week, an increase in imports of mineral market turnover to rise again, the overall rise in price movements. In late March with the construction work was begun on the north, the increase in steel demand resulted in higher prices, and promote the import of mineral prices. It is understood that the steel stocks are not sufficient yet to be suitably added. Judging from the current spot market situation, high-grade resource constraints remain the major factors affecting prices, the market focused on a number of traders in the hands of funds, bullish market outlook is expected to allow traders to ship the enthusiasm is not high, so pricing has remained strong .
The recent steel prices rose from the surface of it is due to the iron ore price negotiations length of the Society - that the steel market, rising raw material prices will be passed on to downstream, but according to the author's analysis, even if the spread of iron in accordance with market ore prices rose 80 percent range estimates, the cost per tonne of steel still 4,000 yuan / ton, by contrast, far from the current futures contract price on the huge premium is still not so reasonable. However, taking into account the iron ore spot prices, ocean freight prices and rising coke prices are likely to exist, there is a big ton of steel costs will continue to move up the risk. For the cost of finished goods prices to reflect changes in consumption are derived from the 2009 winter, also iron ore prices rise, as 63% in the year before the Spring Festival taste of India to break mine up 1,000 yuan / ton case, steel prices have is still low oscillation, while in the spot ore prices, the steel is pulled up sharply, in which lies the root cause needs to start. Recalling the trend of steel prices over the years, demand has been the dominant steel running the most fundamental factors, and costs are only fueled the help or have played a role.
Last week, the shipping market prices upward oscillation. Three Australian mining giant Rio Tinto, BHP Billiton and FMG charter companies in iron ore spot market transactions and the chartering process for nearly 15 pen chartering transactions, and there are a number of other speculative transactions sublease rental home, pulled Quotes waves, but due to the current capacity of nearly 180 no-load fundamentals repression, and the prices increase in speed and did not make these speculative house rent is never easy, shipping price is only more obvious in the last weekend of the surging demand. However, with the spot price of iron ore gradually move up, I believe that the gradual raising sea freight prices will be the future trend for some time.
BDI sea freight index, as well as the main producer of iron ore to China Shipping
A fundamental change in supply-demand relations, but still need to verify that the increased demand for
The latest data show that in 2010 new housing starts from January to February the domestic area of 149 million square meters, up by 37.5%. Rebar needs to reflect the market outlook as a leading indicator for housing the new year starts a substantial increase in the area had expected a decline to dispel concerns. The data also show that real estate development enterprises 1.0469 trillion yuan this year's sources of funds, an increase of 69.5%, of which domestic loans to 248.9 billion yuan, an increase of 46.1%. The above data on the funds in real estate development is still relatively abundant, in the context of government regulation of prices, the domestic, and not reduced loans for real estate development enterprise support, coupled with a large number of safeguards in 2010 to start construction of housing, housing construction this year, the Department of explicit protective housing starts construction of ploidy or less will reach 6.1 million sets of the basis of this estimate can draw nearly 20 million tons of construction steel demand. With the continued growth in the area of commercial housing starts and the protection of the housing needs is gradually emerging, the author is still optimistic about the real estate industry in 2010 the demand for steel.
Steel stocks, the rise in inventory after the end, followed by a period of time will be the steel stocks trading enterprises digestion time, digestion rate of inventory will determine the next steel price changes, so we need to pay close attention to sales and stock traders changes. National rebar inventories last week statistical data, inventories have fallen, and from February production data, is close to the high point of the year 2009 shows that crude steel production capacity will continue to up the space has been relatively limited, future a period of time will appear rebar inventories decreased the community, this time in terms of cost, driven by rising spot steel prices will usher in the best period.
From the historical data, rebar 2-3 months each year is a period of rapid increase in inventories, mainly due to continued production of steel during the Spring Festival, while the downstream demand is stagnant around the Spring Festival will enter the stage, so the recent stock an increase in full compliance with the laws of historical stock volatility. However, in addition to the Spring Festival in 2009 after the steel slump, the 2007, 2008, steel inventories despite a rapid increase around the Spring Festival, but the steel did not show a significant correction, after a period of consolidation after they have been in the in April launched a rally around.
To sum up, in the case of supply and demand improves, I believe that spot prices will be a gradual elevation of the main keynote for some time, in such circumstances, operating Shanghai steel should also be thinking long-based, but high inventory with the soaring water was still a long the main risk, the new entry of the bull should consider doing a good risk-adjusted returns over rebar.
Economic recovery and bull market in the success of steel
The market demand during the Lunar New Year holiday because of the short-term stagnation of the domestic large and medium cities postganglionic a noticeable increase in steel stocks, but the spot price of steel continues to rise, and the recent acceleration highs. To March 16, hot-rolled sheet and strip coils, etc. the price is generally higher than before the Spring Festival, 400 yuan / ton about rising construction steel price trends in Shanghai, Guangzhou and other market performance is weak, but the rebar market in Tianjin and Beijing Steel wire prices rose also reached 400 yuan / tons. In the spot price process, the steel price performance period is relatively weak, the main contract price is not more than one early highs.
Some market participants will be steel prices due to price hikes for iron ore is expected to speculation, but we believe that economic recovery in leading the market trend, the overall rising steel prices is the rapid economic growth, the inevitable result of the release of concentrated demand.
First of all, the global economy towards a steady recovery in the international market ushered in meeting library needs.
China's export-oriented economy in a larger proportion of the national economy, foreign trade import and export directly reflects the change in the gross domestic economic trends. During the financial crisis, foreign trade imports and exports significantly shrink a tremendous impact on our economy, but in December 2009 and this year 1,2 months of import and export data, China's foreign trade is experiencing gratifying changes. China's exports in December 2009 the total 130.724 billion U.S. dollars, monthly export value for the history of the fourth high. 1-2 months this year, China's exports worth 204.082 billion U.S. dollars, representing growth of 3.53% over the same period in 2008. The import side, in December 2009 total of 112.294 billion U.S. dollars of imports, the monthly value of imports to new highs. 1-2 months this year, worth 182.319 billion U.S. dollars of imports, representing growth of 7.55% over the same period in 2008. Consider the price factor, the physical import and export of China's current financial crises has been restored to the level of growth.
Export growth that the world economy is steadily recovering, in this backdrop, foreign enterprises increased orders, is having more and more pressing needs of the complement of libraries. International Iron and Steel Association statistics show that China's major steel-producing countries outside of the output is in a rapidly recovering, the recent output growth is much higher than China, the statement added library needs of European and American countries are producing. In the United States, European Union, Japan and other countries and the region has experienced a long phase to the inventory after demand for its complement libraries will continue for a long period of time. Thus, from March onwards, increasingly active in the international market purchases, China's steel exports and export of electromechanical products directly caused by indirect export of steel, are showing signs of growth.
Secondly, China's industrial production has rarely seen high growth in recent years to promote the demand for quick-release plate and strip.
1-2 months of this year, above-scale industrial added value increased by 20.7%, compared with a year earlier, accelerating 16.9 percentage points in December 2009 compared with an acceleration of 2.2 percentage points. It is also rare in recent years, high-growth, indicating growth in domestic industrial production accelerated to a good foundation to further enhance recovery. The acceleration of industrial production has been reflected in a number of industries, such as the January-February completion of the domestic automobile production and sales were 2.821 million and 2.8757 million, year on year growth of 92% and 84%, continuing since 2009, higher growth. In addition, the state has stepped up cars, appliances and other consumer products, financial subsidies efforts also contributed to the automotive, appliance demand for high growth.
Automobiles, home appliances and other consumer goods, production of high-growth market for the steel plate and strip the needs of fast-release, Baosteel, Anshan Steel, Wuhan Iron and Steel and other enterprises are very full plate and strip orders, after the Spring Festival, to cold-rolled, hot-rolled plate and strip, represented by prices rose significantly higher than other varieties of steel.
Third, the fixed asset investment growth higher than the same period last year, building materials and steel demand is not reduced.
Since China is accelerating urbanization, investment in fixed assets may remain relatively high growth. 1-2 months of this year, China's urban fixed-asset investment 1.3014 trillion yuan, up 26.6% over the same period last year to speed up 0.1 percentage point.
Re-started projects looking at the number, 1-February of new projects 18462, 71 more than same period last year, but the total investment in new projects than the same period last year, an increase of 42.7%. Construction project to reduce the investment scale, but a significant increase, indicating new projects to large-scale projects mainly long construction times, and this year will not be weakened demand for steel materials. Rebar, wire rod prices in the strip after the Spring Festival or less material, there is a great seasonal factors, both demand will gradually reflected at a later stage.
On the afternoon, we believe that due to the trend of recovery in the world economy as a whole is clear, China's economy may be entering a new round of boom, in this context, the steel industry supply and demand fundamentals will have a significantly improved steel market in 2010 may be bull market.
The 2010 bull market for steel is still the most direct factor in the currency. As China's central bank raised the deposit reserve ratio twice, the Fed also raised February 18 direct loans to banks charge discount rate, so some market participants believe that China and the U.S. has begun to take practical measures to withdraw from loose monetary policy, global the contraction of liquidity has come, bulk commodity prices will also be turned down. In February, the domestic consumer price index rose 2.7%, the market is widely expected when the CPI rose more than 3% of the central bank will choose to raise interest rates, that is, if the CPI continues to rise, and a quarter, more than 3%, the central bank may choose early April interest rates.
The market's interest rate will lead to tightening of money supply leading to conjecture that the disadvantaged in Shanghai and Shenzhen stock markets down, commodities futures, the main reason for sluggish trend. But the reality is that the end of two, China's broad money supply grew 25.52%; narrow money supply grew 34.99 percent year on year. M1 growth continues to far higher than the M2, showing the real economy is very ample supply of funds, and the degree of economic activity continued to strengthen, accelerating the velocity of money. The stock of the past, low-speed flow of money will accelerate the future of commodity prices, a huge push up power, the full and accelerated the recent steel price increases, it is the role of monetary factors reflected in commodity prices.
Premier Wen Jiabao recently said that China's macroeconomic policy, "because sometimes moving, dynamic and static without losing the time." We believe that the Governments concerned, the recovery overriding the general trend of global economic recovery is also the country where the government's recent policy objectives. China's macro-economic policy can only promote sound economic development, while the economy will not lead to large fluctuations.
Steel market in 2010 the bull market may be the second largest factor is the international market demand for long-lasting fill libraries. We estimate that stocks go through that after a long, Europe and the United States developed economies, the demand is just beginning to fill library will keep 3-6 months, during this period, iron and steel raw materials, industrial components, the demand will continue to grow, domestic steel demand will occur 3-6 months of consumption season, coupled with the upstream raw material prices, steel markets have a great probability that the bull market.
