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Chinese steel prices will be comprehensive rise?

Release Date:[3/30/2016] Hit Count:[]

Chinese steel prices will be comprehensive rise?

This year, steel prices appear rose sharply. Analysis of the reason why steel prices rose sharply, the most important factor is the pre-sale price below the production cost of the median line, some companies were forced to cut production losses. Statistics show that the first two months of this year, the country's crude steel production fell 5.7%, steel production fell 2.1%. At the same time, "to buy up not to buy down" the law of the market also makes the rapid decline of the social stock, significantly lower than the reasonable level, so that tends to balance supply and demand. Moreover, the global iron ore and energy prices, also fell to the median line cost, high-cost production capacity have been withdrawn from the market, to promote the smelting of raw materials, energy and shipping prices bottoming out. Thus, this year, the national steel prices, its main influencing factors and features, it still belongs to the low price rebound after oversold, rather than the full reversal of the steel market. That is, the pre-steel prices fall too far below the cost of the median line, and ultimately lead to the market mechanism for the mandatory supply of steel suppression, thereby laying the basis for recovery in the price of steel.

For Hebei overcapacity prominent steel industry, Hebei Governor Mr. Zhang said the 2020 production of Hebei Iron and Steel need to be reduced to less than 200 million tons, will shut down 60% of the iron and steel enterprises. That means,  there are 60% of the iron and steel enterprises to shut down integration. The steel and iron wire price will still keep the trend of rising.

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