Analysis Of China's Steel Prices In 2010, "up" To Where? - Medical Air Cushion

With the recent iron ore price negotiations Jianrugaochao

, steel prices began to shock the market higher, gradually speed up the recovery in the lower reaches of the present demand, steel prices boost the cost of production rising, the prices seem to have a good reason In such circumstances, coupled with ample capital market, steel prices appear flexible, overall presentation rose small back upward trend shocks. Steel prices up to where? As the market has become the focus of the parties to the hearts of doubt, the author combines the latest of the following changes in the market for everyone to do simple analysis, I hope you can grasp the trend of steel prices help later.

Light steel iron ore talks

Agreement in accordance with the traditional long iron ore price mechanism, starting from April 1, a long association mining implementation of the new year should be the contract price. According to data released by China's General Administration of Customs show that China's imports of iron ore last year, about 6.3 million tons of imported iron ore annual average conversion price of 79.8 U.S. dollars / ton. The current iron ore spot price skyrocketing to 160 U.S. dollars / ton, about twice the average level of last year, China's iron ore costs may thus doubled to more than 100 billion U.S. dollars. Vale recently announced that the company has 97% of the customers under the new agreement on iron ore pricing mechanism, complete a preliminary agreement reached and corresponds to its worldwide sales of 90% of the contract. But did not disclose the price of iron ore.

Japan's major steel companies and Brazil's CVRD iron ore prices this year have been identified, the Japanese import price is 110 U.S. dollars / tons, the highest grade ore powder from a reference price of 57 U.S. dollars a year / ton rose to 122.2 U.S. dollars / ton, or up to 114.38%. Japan and Rio Tinto and

BHP Billiton is also negotiating prices may remain at 110 U.S. dollars / ton level. In addition, the agreement period is shortened from 1 year 3 months to maintain the 40-year iron ore price mechanism co-chief faces collapse.

Although 114% of the increase will make a long association mining the FOB price much higher than the highest price (2008), but the shipping charges calculated at current long association mining domestic Juban Jia is still lower than the 2008 peak. CVRD and Rio Tinto to two fine ore as a reference, 114% gain in 2010 to make a long association ore FOB price is much higher than the 2008 record high. However, if considering shipping costs, according to the current iron ore sea freight (2010/3/27 days Tu Balun to Beilun 23.98 yuan / ton; Western Australia to Beilun 10.02 yuan / ton), taking into account the costs related to insurance Australia's long history of close co-mine domestic Juban Jia highest point since, as 1149 yuan / ton, early in June 2008 the highest price of 1164 yuan / ton. Brazil's long association mining domestic Juban Jia was 1191 yuan / ton, from the highest point of 1,562 yuan in 2008 / t poor 371 yuan / ton.

Macroeconomic policy to promote growth

After a quarter of the overall review of the domestic economy, is evident that economic recovery has been established, recently, the central bank's monetary policy committee in the first quarter of 2010 regular meeting, the central bank's stance and policy-making departments in recent months, public statements, it means To continue a moderately easy monetary policy, deal with maintaining stable and rapid economic development, economic restructuring and management of the relationship between inflation expectations. Urgent need to increase economic growth, efficiency, market power is still insufficient, the performance of which is the most concentrated active fiscal policy and loose monetary policy unchanged.

Appear in two important data, the country's budget deficit this year is 1.05 trillion yuan, which is the highest national deficit in history, according to prevailing standards in terms of a country's fiscal deficit should be the standard line does not account for the proportion of GDP more than 3%, 2.8% domestic now, from this perspective is now safe, but the amount is relatively large, needs to continue its proactive fiscal policy. In addition, M2 appeared 17% increase, which also shows a moderately easy monetary policy will not change. "

In the first half of the base currency control policy to keep fine-tuning the basic situation, to restore confidence in the market relatively strong, leading to downstream industries covering raw materials inventory, stock market, the acceleration of the direct formation of digestion. Directly reflected in the economic statistics on the PMI index is rising, in March 2010 China Federation of Logistics and Purchasing released China's manufacturing PMI at 55.1%, up 3.1 percentage points from last month. Manufacturing PMI is a composite index, in accordance with international common practice, the five main diffusion-weighted index is made. PMI index is usually above 50%, reflecting the overall economic expansion; less than 50%, reflecting the recession.

From 11 sub-index of view, ibid month compared to all the index increased to varying degrees. Among them, the production index, new orders index, new export orders index, the backlog of orders index, purchasing volume index of imports index, the purchase price index rose significantly, an increase of over 4 percentage points. From the index level, the production index, new orders index, purchasing volume index, higher purchase prices were more than 55%, particularly in the purchase price index was the highest, reaching 65.1%. Driven by the PMI index, PPI rose 5.4% in February, or 1.1 percentage points last month to expand, mainly by raw materials, fuel and power price increases. This shows the strong domestic demand and exports. Also indirectly promoted the series launch of the second half will exit the policy.

From a macro perspective, now is the steady rise of the key point to speed up once the real economy in the currency driven by loose rebound on accelerating out of control of the situation, monetary policy is bound to tighten up, the series will be rolled out policy , which is the most critical when raising interest rates, the recent trend of rising house prices show high overall liquidity situation in the proliferation of reproduction, judging based on current realities, domestic interest rates in two quarter point may be the beginning of the end of the third quarter rooms.

Post-steel Trend Forecast

From the current trend in terms of various varieties, hot rolled downstream by the export-led and market impact of change for the better, deeper degree of concern general volume and general volume is still lower than the current price of steel, this bargain-hunting buying intervention the recent promotion of thermal paper prices continued to rise, according to the current domestic and international spread, the recent outbreak of hot growth in the export situation will occur, in the first half of the state can not avoid running high. The cold-rolled automotive industry driven by the lower reaches of the first half of consumer strength or secure, and rebar start short-term increase by climate warming, combined with the upstream in the product chain, raw material costs by promoting high-impact, short-term there is upside, but rate has not be great, plus the rebar rely mainly on the downstream consumer real estate, from the current situation, affected by housing prices rising again, the real estate industry is imperative to impose new regulatory measures, half rebar price trends not optimistic. In other varieties of steel, the current see there are some compensatory growth galvanized space, on the one hand, present some of the same specifications than the cold-rolled galvanized prices lower, on the other hand, the recent price surge will also promote the galvanized zinc production costs.

by: gaga

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