The rising price of steel has a great impact on many industries, because steel is the raw material of many products closely related to steel, including home appliances, construction, machinery, automobiles and so on. In the context of rising steel prices, the prices of these products have also risen to varying degrees.
For example, since last year, due to the rising prices of raw materials such as steel, the prices of final products such as washing machines, range hoods and refrigerators have risen sharply.
Therefore, the rise in steel prices not only affects the manufacturing industry. In fact, the rise in steel prices will eventually be transferred to consumers, so consumers will eventually have to pay for the rise in steel prices.
Then why has the price of steel been rising recently? What is the power behind this?
During this period, steel prices continued to rise. The reason is more complicated. There are reasons for the rebound in market demand, some reasons for controlling capital, and some reasons for the rise in raw materials.
First of all, market demand is picking up.
First of all, from the perspective of market demand, since May 2020, China's economy has gradually returned to normal, and China's demand for steel has also gradually returned to normal. Especially under the impetus of investment, all kinds of infrastructure have contributed to steel. The rapid growth of demand, coupled with the relatively high export growth rate of some products such as household appliances and machinery, has led to a gradual increase in market demand for steel, and even a tight supply of steel in some areas.
In addition, after entering 20021,the economies of many countries in the world began to recover slowly, and everyone's confidence in the future global economic growth was restored. According to the forecast of relevant institutions, it is predicted that the global economic growth will reach a considerable level by 202 1. ? The global GDP growth rate may reach about 5.5%.
Against the background of relatively obvious confidence in economic growth, many people may worry that steel prices will rise in the future, so they will buy some raw materials in advance. This market demand is also an important reason for the direct rise of steel prices.
Of course, from the actual trend of steel prices, the trend of steel prices obviously runs counter to market demand. Although the economies of many countries are gradually recovering and the demand for steel is increasing, the market demand is growing faster. Not as fast as the growth rate of steel price, that is to say, the growth rate of steel price can not fully reflect the market demand. A large part of the rise in steel prices runs counter to market demand.
Second, the price of iron ore has risen.
Over the past year or so, global iron ore prices have risen sharply. For example, in March 2020, the price index of Platts 62 steel was only about 80. As of May 202 1, 12, the price index of Platts 62 steel has risen to 233. 1, which means that the price of iron ore raw materials has increased by more than 190% in the past year.
The rise in iron ore prices has a great influence on the trend of steel prices in China, because a large part of iron ore in China is imported from abroad. For example, by 2020, China's iron ore imports will exceed11million tons. Moreover, most of these iron ores are imported from Brazil, Australia and other countries, and the import source is relatively single. Therefore, in fact, in the context of rising iron ore prices, many steel mills can only be in a passive position.
Against the background of rising iron ore prices, the steelmaking cost of steel mills has risen rapidly, which is also one of the main driving forces for the rise of steel prices in the past.
Third, promote capital.
As we mentioned earlier, although the growth rate of steel demand in China and even the whole world is obvious, the growth rate of this market demand is obviously opposite to the growth rate of steel prices, which shows that there is a bubble in some steel prices.
In fact, a large part of the credit of this price bubble is driven by some capital, because since March 2020, countries around the world have started to release water, and the market currency is more loose, but the overall economic growth rate is not ideal for the market. ? A large amount of capital will enter the financial market. As an important part of the financial market, steel futures also attract a large amount of capital investment.
With the intervention of a large amount of capital, it is normal for steel prices to run counter to the actual market demand, because for these capitals, they are speculating steel futures instead of spot. For steel futures, as long as someone takes orders and the price is higher, the price will continue to rise.
In addition, due to the rising price of iron ore raw materials, there is actually capital behind it, because the pricing power of iron ore is currently in the hands of some iron ore giants in Australia and Brazil, and there are actually some behind these iron ore giants. The capitals of Japan and the United States are under control. On the one hand, these capitals control the exploitation of iron ore. On the other hand, they artificially create false trading prices through their own control of steel mills and steel traders. This price determines the global price of iron ore. Have a great influence.
Therefore, driven by various factors, global steel prices have continued to rise over the past year or so, and there is no fuss. However, with the global steel demand gradually returning to normal, and the possibility of maintaining a loose monetary policy in the future, I believe that steel prices will definitely stop rising or even fall back in the future.