SMM5, March 11: before the Ministry of Finance issued a trillion special debt line in advance, coupled with the recent CSRC and the Development and Reform Commission jointly issued infrastructure REITs policy, will stimulate market development, invigorate the infrastructure stock of assets, so that more social capital involved. The heat of the infrastructure plate is not reduced, and the supply of building materials in the lower reaches is in short supply. Steel supply and demand also increased, but previously higher than in previous years to curb steel prices skyrocketed. Ferrous metals as a whole fell slightly today, but are still in the rebound phase.
The demand for infrastructure-related sectors is booming, and the current infrastructure, as an important tool for stable growth, has led to a high demand for related products. Cement, the national cement shipments continue to refresh the high level, the national average price of cement has risen for three weeks in a row. In the second quarter, many of the policies introduced in the early period are being implemented quickly and more stimulus policies may be released in the later stage, coupled with the rush of construction sites, demand has basically recovered in an all-round way, inventories have been digested to a lower level, and cement prices in many places have risen in the new round. On the mechanical side, total excavator sales in April were 45400, up 59.9 per cent from a year earlier, according to research and report data. From January to April, sales totaled 114100 units, up 10.5 percent from the same period last year. The actual demand situation of the terminal is better, mainly because there is a more obvious pressure to protect the supply, and the current out-of-stock ratio is still about 20%. Terminal sales are still very hot and are expected to continue to grow significantly and positively in May.
The supervision of air pollution is still under strict control, and the production restriction policy disturbs the production pace of steel enterprises. Prior to this, Tangshan Fengrun District temporarily tightened control, in the implementation of May control measures on the basis of requiring enterprises in the area to implement the relevant production reduction and tightening measures. This year is the end of the three-year action plan to win the blue sky defense war, at present, many places have issued intensive policies to attack key defense, combined with their own actual introduction of relevant governance policies, iron and steel production enterprises as an important regulatory target, steel production may be affected in the later stage, and then support prices.
Overall, steel fundamentals continue to maintain a double increase in supply and demand, but there are no significant changes. On the market, if the short-term breakthrough pressure level is fruitless, there may be a rush to fall back, on the whole, even if the recent decline in steel inventory speed, steel price upward space is limited, but the short-term steel rebound stage is not over.
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Registration contact: Lu Qingping, Iron and Steel Division of SMM
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