China Steel hard time to come

  • Monday, March 17, 2014
  • Source:ferro-alloys.com

  • Keywords:Steel, ferroalloys, coke
[Fellow]So,no doubt that China will encourage New Economy development, that is E-Commerce ,New Teach ,New material and other information services industries. There is the key point for economy to change, the developing speed will be drawn down. that will influence the...

First of All, I am not upset about Chinese steel Industry will be callapsed in 2014.The demands for steel are still growing up YoY. The problem is the price of steel has been decreased to historical bottom level ,due to overproduction supply than demands from local major industries. The demands from Infrastructre,Real Estate and Auto Indurstries will be nagetively increased in 2014 and the year after. The reason is China New Governmental Team will mainly focus on readjust the economic development structure after express developed for 10 years. China wishes to develop New economy as major potential development aspect to replace traditonal economy of Investment, Export and Consumption.

So,no doubt that China will encourage New Economy development, that is E-Commerce ,New Teach ,New material and other information services industries. There is the key point for economy to change, the developing speed will be drawn down. that will influence the demands for Raw materials like Iron ore, Coal, Ferro and non-ferrous,which it will not be increased. and Prices of raw materials have no chance to wake up again due to oversupply and hard competetion.

Secondly, China Evironmental problem in whole country forced Policy makers to control the investment in every industries.The small and medium sized plants of steel, ferro-alloys, foundries, chemical, cemment and nonferrous metals will be ordered to close when faced heavy pollution on air.That will definately influence the economy development speed. So, PMI fallen down than 50% level in Jan and Feb was easy to understand.

The ferroalloys, iron ore and coal market will continue dropping due to over supply . HBIS, the largest steel mills in China just opened their tender price for SiMn6517 at RMB6650/mt deliver to the plant by 90days payment, that is 200 RMB/mt decreased than January, Ferro silicon 6100RMB/Mt delivered, that 400RMB/Mt decreased, about 6.7% decreased than last month. and even so, HBIS said they already fully booked.

One major SiMn producer told that they have no chance but to accept this price, even no any profit at that level. In fact, Manganese Ore price has been on weakness since last December, but Mn ore price has not been reduced over than 5% since last end of year. So, Simn producers have hard time, but even worse time is not coming if about 30% ferroalloys plant have not been shut down. Market will keep sluggish and Price will drop further. Even Chrome ore meet same situation.

So, raw material market will be sluggish further. China has not issued new encouraged policy yet, bank loan is not rejected to steel, but the bankers already take very strict control method or limit loan to steels and other high energy enterprises. and due to bad market, steel inventory has kept high records, and steel traders met fiancial risk and already lose huge. Shanghai ,steel traders concentrated place, already happened steel traders bankruptted due to return bank loan dealine arrived. The only hope is to wait Chinese Congress ,If policy makers will reconsider the enconomy situation and if impose encouraged polcy, reduce taxes, support small firms, stablize currency flatteration ,China still will be the engine or flag of the world economy.

  • [Editor:test]

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