US Department of Commerce, mainstream steel prices, unified pace policy regulation will affect the market

With unprecedented efforts to reduce energy and emissions, the impact is immediate. In front of the power-restricted production bar that has no room for negotiation, it is expected that the reduced production will stimulate a rapid rebound. Baosteel, Wuhan Iron and Steel, Shougang and other steel companies have all raised their prices. Most brokerage analysts believe that the support of steel prices will be supported in a period of time, but the trend of opportunities has not yet arrived.

Energy-saving and emission-reducing steel price rebound stimulated from the end of this month, Jiangsu and Zhejiang began to limit production of energy-saving emission reduction, Hebei Province was included in the key limited-producing provinces, which hopes to control iron and steel production through limited production, limited power, punitive electricity prices .

According to estimates by China United Steel, the limited production in Hebei Province will reduce its crude steel production in September by 3.2 million to 3.6 million tons, of which the production of crude steel in Tangshan, where production is most severely restricted, will decrease by approximately 2.5 million tons. Together with other provinces such as Jiangsu, Zhejiang, Guangxi, and Guangdong provinces, the country’s crude steel output in September will be reduced by 5.05 million-5.6 million tons, and the preliminary estimate is 1.52 million-157 million tons, which is relative to the crude steel production in August. It will decrease by 9.78%-10.84%.

If, in the next four months, implementation of the production restriction in September is still meticulous, the production of crude steel will be limited to 20,200,22.4 million tons. Dongguan Zhuoping, a researcher at Dongguan Securities, predicted that the national crude steel output in 2010 will be The 642 million tons will be reduced to about 620 million tons after the production limit, which will be the first year-on-year decline since 1998.

Obviously, the demand for production restriction has undergone major changes. On the one hand, it is the sharp reduction of the supply side, and on the other hand, it is during the peak season of the downstream demand side. This has caused the market to show short-term supply shortages, which has led to a sharp rise in steel prices.

With limited production stimulation, long products continued to be the rebound leader. On September 9, the prices of rebar and wire rod were RMB 4,240/ton and RMB 4,340/ton, respectively, a sharp rebound of 5.74% and 3.83% from the beginning of September; the same period in August. It rebounded by 9.84% and 6.37%.

At the same time, mainstream steel companies have introduced pricing policies in October, and prices have become a uniform pace, ranging from RMB 100-400/ton.

Benefiting from the rise in steel prices, the estimated cost of Liu Yuanrui, a steel industry analyst at Changjiang Securities (10.73, -0.22, -2.01%), lags behind the improvement in gross margin level in January. In the context of cost reduction, gross margins for cost-based steel price increases are even greater. The simple calculation of the gross profit level will be most obvious when the supply is suppressed by external forces, and the actual profit may have to be further considered comprehensively because of the increase in costs caused by the shutdown.

Regarding the implementation of follow-up policies, although there are slight differences among the brokerage analysts, most of them believe that follow-up actions will follow. As a result, with the continuation of production cuts and production cuts, steel prices will be more supportive.

Focus on Trading Opportunity From the mid-term perspective of the industry, the cycle of repairing the industry's ecological relationship has only just begun. The pressure on the government's energy-saving and emission-reduction has not been substantially alleviated. The expectation of strengthened governance will stimulate the dominant steel mills to fully increase their October price policy again. .

According to analyst Hu Yuan of Everbright Securities (14.80, -0.24, -1.60%), steel prices will continue to maintain a rising trend in the next 1-3 months, accompanied by an increase in the profitability of the steel industry.

Concerned with the steel price, at the same time, ore prices can not be ignored. The reality is that, subject to the reduction in the 4th-term agreement ore, the amount of imported ore prices fell. However, in the long run, Liu Zhuoping, a Dongguan securities researcher, still believes that the willingness to increase the price of ore is stronger. The reason is that in the process of shifting the quarterly pricing mechanism to spot prices, iron ore will contain steel earnings for a long time. The reduction of the ore price in the 4th quarter was mainly a confirmation of the drop in steel prices in June and July. As the steel price continues to rise in the context of limited production, the spot ore price will still come from behind, and in 2011, the ore price will continue to increase. The probability is still greater.