Steel prices rising steel industry recovery ahead of schedule or will

Steel market in the near future, it seems, is showing some signs of recovery, steel spot prices rise continuously, not only many steel mills have raised ex-factory price. In addition, rare earth prices over the years & other; Falling off & throughout; State, a sharp rise, since June 28, sheng and resources, minmetals rare earth rises to 62, respectively. 61%, 51. 76%. While in terms of industry, two on the market as a whole is still is in a state of supply exceeds demand, capacity, inventory is still the main direction of the next few years, the purpose of this article is to uncover support the logic behind the rise, and to judge the follow-up. Since the fourth quarter before the Spring Festival this year, the market for a new round of stimulus plan higher expectations, enterprises have to inventory turn to fill inventory, steel social inventory once rose from 10. 47 million tons to 14. 82 million tons. And as expected, after the market into the initiative to inventory the stage, mainly has two aspects: one is led by baosteel steel straight cut ex-factory price; 2 it is social inventory decline for steel, of which 10. 94 million tons of rebar inventories since mid-march high dropped to 7. 03 million tons. Previous round for the duration of the inventory cycle is shorter in our traditional knowledge, which is the weakness of sexual response carefully, also is one of the main factors that support periodic follow-up market repeatedly. Months of initiative to inventory status for this rally provides basic support, in addition, there are other factors. The first is revealed policy logic behind money shortage. The new government had doubtless recognize the flaws in the way of China's economic growth in the past, and the determination to turn by an iron fist. By tightening of liquidity, an idle funds between Banks, and then cut off the basic survival space of the housing, the housing bubble, it is a continuation of this line of thinking. Only after the cut away the rotting flesh, basic housing needs to be free, new urbanization will really start to get ahead, otherwise will repeat, this is obviously runs counter with the purpose of the government. In the short term, the new urbanization, therefore, need not to the housing, the housing market, make a substantial positive related industries such as iron and steel industry. The government, however, was not on the housing, and in the extrusion foam, so the infrastructure, affordable housing, commercial real estate in the coming years will be the construction steel main areas; In addition, if the land supply can increase as scheduled, will also drive the construction steel increases. Followed by the recent series of actions in the field of environmental protection, of course, this is also carries on restructuring the overall train of thought. On GDP growth falls greater tolerance, will not be issued not only means that big policy stimulus, also is a more thorough treatment of existing industry, especially to reverse the past environment for growth, in the future for achievement of clay type growth mode. Future, therefore, eliminate backward production capacity, to renovation projects industry will tend to be the norm, and implement, this will make the steel industry is passive to production stage. It is based on the expected, resulting in enterprise starts rised will and willingness to rise together. Finally, from the point of iron ore market, although the international iron ore in a state of oversupply, but highly monopoly the market often appear repeatedly, and it is the early rising iron ore prices make up the current steel prices and a major factor; In addition, recent rumors policy makers will continue to develop railway, will be in the short term trend of steel prices keep rising. 'In the third quarter of 2013 released by the cic advisory policy interpretation report, taken together, the short-term support steel prices is still bullish on the surface of the news, the cause of unsustainable; Iron and steel industry as a whole is still over the next several years will be in production capacity and inventory status, but will show the stage again and again, there will be several rounds of shorter inventory cycle; In the long run, as the government initiative to squeeze the bubble, shipbuilding, machinery, and other areas of the entity is expected to advance recovery, recovery, which will be conducive to the iron and steel industry and steel mills of the active and passive to capacity is very likely to accelerate recovery of iron and steel industry.