Steel prices down 56% close to steel mills cash cost

Steel inventories, society since late march, steel inventories decline for 15 consecutive weeks, by March 22. 51 million tons to 16. 91 million tons this week, fell 25%. Rebar social inventories fell from 10. 8 million tons to 7. 41 million tons of this week, fell 32%. According to the above calculation of inventory stock consumption ratio close to the same. As steel prices fell, the survival condition of steel has become increasingly difficult. Network mold, experts consider China, with the decline in inventories, tons of steel production cash flow is negative, the steel price on the bottom. But recently the sweep of the storm is expected to prompt the environmental protection from the bottom up. According to the data released by the environmental protection, air pollution is most serious in 1 to 5 month in 20 cities, 17 cities with steel mills, iron and steel industry have unshirkable responsibility for the current atmospheric pollution. According to the check key domestic large and medium-sized steel mills in China energy conservation and environmental protection investment of per ton steel is only 25. 21 yuan, is far lower than the level of foreign enterprises, especially the part of the history behind failed to eliminate capacity, environmental protection facilities, technical transformation is difficult. At present our country two-thirds steel sintering machine hasn't been on desulfurization technology. Has been installed desulfurization facilities desulfurization effect also is very poor, the average desulfurization effect is only 38. 6%, far from the design values and national emission reduction requirements. Compared with 2010 in 2012, nearly 10% lower desulfurization effect. Market sources said recently, the most strict measures against atmospheric pollution, is about to come on & other; Energy conservation and emissions reduction & throughout; To death upon the iron and steel industry, such as strengthening check existing desulfurization equipment, the normal operation of the supervisory desulfurization facilities, have not on the desulfurization facilities to iron and steel enterprises have their limits or even shut down. Considering the previous execution problem, target into the government will not rule out prevention and control of atmospheric pollution binding and refine the specific policy assessment index. In addition, the air quality in the key areas, such as short of predetermined standards, in addition to the implementation of regional eia in limited approval, approval of new atmospheric emissions in the area may be taken by project of punishment. If the real launch and implement these measures, the iron and steel industry of hebei region by the huge impact, and hebei region as the largest steel production in China, the supply will form strong support for the steel prices fell. Loss of per ton steel as steel prices fell, the steel plant of nearly 300 yuan, the current steel prices close to the cash cost of steel mill. Actually in the process of steel prices continue to fall, because raw material inventory and finished goods inventory, lead to steel mills is greater than the losses of real time measuring the production of profit and loss. According to historical data, when loss of per ton steel reaches 300 yuan/tons, will make the steel mills of cash income is negative, that is to say, will soon appear steel mills cut production. From recent tangshan steel mills can be seen in the utilization of blast furnace data, recently, blast furnace starts at around 91%, far lower than at the beginning of the year 98. 65%. Steel enterprises more than a matter of fact, we statistics for larger scale, relatively competitive steel mills, and some small steel mills operating at far less than that. Especially in the recent market funds more nervous, there have been a few mills because of capital chain rupture and collapse phenomenon of production. It seems that there's crude steel supply downward trend in the future. Steel association key steel enterprises, meanwhile, stocks also fell, focus of steel mills in April inventory is 40. 29 million tons, the data may reduced to 39. 73 million tons, in June is expected to focus on steel mills steel stocks would drop to 39. 35 million tons. Over the same period, the inventory of tangshan steel billet is declining, from a high of 1. 97 million tons to 880000 tons, the recent decline of 56%. Therefore, only from the point of the inventory cycle, clear library period end of steel, steel prices poised to rise. In conclusion, as a whole, the Yin falls last past, most of the varieties of basic end destocking, after the steel mills posted losses, further an exodus of kinetic energy is not strong, the market is expected to enter the relative stability of the shape of the strong trend. To enter in the third quarter, if supply fell again with large-scale steel mills and strict implementation of the environmental protection storm, the rise in steel prices space will be opened.