Due to the hot steel market in recent years, the investment boom of steel products has been triggered. Due to inertia, the steel market price has been running at a high level, stimulating steel mills to expand production capacity and invest in new projects. Here, the output of steel products has reached a new high. Under the influence of the rapid growth of market and output, the normal market demand is particularly weak, which has brought about a serious chain reaction, and the market price collapse is inevitable.

Demand is the main reason for the rise in steel prices.

China's economy is developing constantly, and high-speed rail, subway and other tracks need a lot of steel. To build a well-off society in an all-round way in 2020, we will build roads, which also requires a lot of steel. Investment in infrastructure construction will remain high, and the demand for steel for infrastructure construction is expected to continue to increase. According to our research, the infrastructure projects in the first half of the year mainly focused on municipal projects such as viaducts and subways. In the second half of the year, while continuing to invest in the projects started in the first half of the year, the railway construction projects will also start in September, 65438+ 10, which will bring new increments to the spiraling demand. In addition, with the rapid development of the real estate market, a large number of houses have been built, workers live and have a stable home, so a lot of steel is also needed. All these have led to the ultra-high steel output and the hot steel market.

Steel mills are full of orders and have a good mentality, and there are still expectations for price increases. According to our previous research on steel mills in different regions of China, steel mills generally report that orders on hand are full and product supply is tight. It is expected that the ex-factory price will continue to increase in the later period and continue to push up the spot and futures prices.

Output and social inventory are also declining, easing the pressure of market supply and demand. The invisible hand of the market will always intervene, and the steel market cannot be disturbed or abnormal. At the same time, the current cost support is still relatively large, so enterprises will also reduce production. However, the demand for building materials is about to fall seasonally, and the pressure of supply and demand will increase in the later period. Therefore, it is difficult for steel prices to fluctuate greatly in the short term. The prosperity of steel market depends on the relationship between market supply and demand.