Into the spring, the most obvious improvement in the steel industry is demand side. From the day before the China Federation of logistics and purchasing, the iron and steel industry in March, the National Bureau of Statistics Service Industry Research Center released the PMI index, the index in March reached 49.3%, a rise of 6.5 percentage points, after 2 consecutive months of decline, the rise, approaching 50%. One of the joy is that the new orders index and new export orders index reached 52.7% and 52.1%, more than 50%, the chain rose rapidly, reaching a new high of more than six months. This indicates that the current and late demand effectively pick up, gradually increasing downstream start, capacity release began to accelerate. From the production point of view, CISA estimated in late March the average daily crude steel production reached 1 million 890 thousand tons, compared with a mid fell slightly, but overall is still high, in March the overall average yield remained at the level of 1 million 900 thousand tons, essentially flat compared to last year. This indicates that while the downstream demand upgrade, steel production is also gradually active.
Growth in demand also led to the upward price. The current steel prices of raw materials remained stable, the domestic iron ore and coke prices rose significantly in the overall smooth, cost no circumstances, including the price of steel rebar spot prices continued to slightly upward, the grade rebar spot prices overall than the end of March rose about 40 yuan / ton. This shows that the steel price rally more from demand, rather than cost push. With rising prices, the recent part of the traders shipping has started to slow down, for the market outlook optimistic forecasts and ease the capital chain, traders mentality has been from the original to the shipment until now watching sell. As the mentality improved, making the price gradually open up the upper space.
However, the current steel price increase is not the biggest reason lies in the impact of the overall high inventory of steel. From the data, although the steel stocks more than a month to maintain a downward trend, but the total inventory of the main varieties of steel is still maintained at more than 18 million tons, while domestic steel social inventory is currently up to 8 million 190 thousand tons, were higher than the same period last year, this also is the most important reason for everyone to maintain a cautious attitude. Of course, the impact of increased production on digestion inventory can not be ignored, if the inventory can not be significantly reduced, will bring some constraints on steel prices.
From the market outlook, slow up or will continue. On the one hand, in 4, 5 and two steel consumption of the traditional peak season in August, the demand for steel will remain high, but the yield is now close to a high level, a substantial increase to the possibility is not very high, it also laid the foundation for the rise in price. On the other hand, easing the financial side is expected to remain strong, although the country has the growth rate for this year's GDP down, but after the last December and February this year two RRR, the parties to the third is expected to drop quasi enthusiastic, especially the current difficulties facing the real economy, the possibility for the fine-tuning of the policy is not small. Of course, the price of action is not without obstacles, inventory decline rate will still have a greater impact on subsequent market gains, the current biggest possibility will be to maintain a slow decline in domestic stocks. However, if domestic stocks can appear in the market season significantly effective fall, will further establish its price trend, on the contrary, or will cast a new shadow for the entire steel industry.