In June, the construction steel market price still has a shocking bottoming process. It is impossible for the price to rise sharply, but it will not drop significantly. The shock will bottom out and will become the main tone of the building materials market in June. This is the prediction made by Liang Taigeng, general manager of Shanghai Hualei Enterprise Development Co., Ltd., in an interview with the reporter.
According to Liang Taigeng's follow-up investigation of the construction steel market in May, in the past May, the construction steel market such as rebars and wire rods generally showed a weak trend, prices continued to fluctuate, and by the end of May, it had fallen to the lowest level this year. However, in the last few trading days of May, there were signs of stabilization and stabilization, but the market transactions were still light and the sales were not so smooth. The reason was that the effective demand of downstream terminals was insufficient, and the power to support price increases was limited.
So, what will happen to the construction steel market in June? In this regard, Liang Taigeng believes that it is still in a period of shock and bottoming, and the situation of sharp rises and apparent declines does not appear to occur. This is mainly due to several factors:
The first is influenced by favorable factors such as “steady growth, expanding domestic demandâ€. Recently, the state has intensively introduced a series of policy measures to promote economic growth and development, such as increased investment, approval and start of a number of major projects, will stimulate demand for steel products, enhance confidence in the market outlook, thus curb the continued decline in steel prices, Or the downside is limited. However, these positive policies are actually implemented in pulling steel demand, and there is still a process that will not immediately take effect. It is expected that by July and August, the substantial effect of the favorable policies to stimulate steel demand will be expected to show. Because of the project's determination, the availability of funds, and the official start of construction, it will take time. In June, the favorable policies will not immediately drive the demand for steel products.
Second, the situation of oversupply cannot be fundamentally improved in June. From the aspect of supply and demand, some steel mills have started to cut production due to losses, but the intensity of production cuts is not great. As the price of this round of steel market continues to fall, an important reason is that the prices of billets and iron ore have fallen, and the decline rate is greater than the price of finished steel products. As the raw material market price fell, the cost pressures of the steel mills were eased, the cost was reduced, and the power output of the steel mills was not strong, so the supply was still strong. From the demand level, in this round of steel price decline, downstream end-users are mostly waiting and seeing under the psychological influence of “buy up or not buy downâ€, and the willingness to purchase is not strong, so terminal demand is decreasing in May. Less than April. From the trading volume of some steel traders, it can be seen that sales in May decreased by 20% or 3% from the previous month. In June, it will enter the Meiyu period, the downstream terminal demand will not be significantly released, the demand will not be too large, it is difficult to support the sharp rise in prices.
Third, the shortage of funds still exists and it is difficult to ease. In June, steel traders concentrated their time to repay the bank. During the New Year's Day of the Spring Festival, steel traders’ loans to the bank expired in June and required repayment. In order to raise funds, it is not ruled out that some steel trade companies will lower their prices and shipments, return the purchase price, and bring the market price closer to the bottom. Moreover, many banks nowadays have limited the amount of loans for steel trading companies, particularly steel trading companies represented by Fuzhou. Due to the control of bank loans, the funds of steel traders have become increasingly scarce. This will also curb the release of mid-end demand, which also constrains price increases.
The fourth is the influence of the external environment. At present, the European debt crisis is still serious, which once again exacerbates investor worries about the European debt crisis. ** The cost has increased dramatically and the banking system's problems remain. Although the European Commission proposed that the Eurozone establish a banking union and consider using a permanent salvage mechanism to provide financial support for the banking system, the various member states of the euro area have great differences. The market is concerned that it may take a long time to reach an agreement on this matter and it will not be able to help solve the European debt crisis in the short term.
Judging from these factors mentioned above, the favorable side of the steel market in June is also favorable to the empty side. The existence of these factors will make it difficult for prices to rise significantly and will not be able to continue falling sharply. Therefore, the current supply and demand in the construction steel market Relationship, the price may have a shocking bottoming process, the specific price trend will be in the cost of online and offline 200 yuan / ton fluctuations.
According to Liang Taigeng's follow-up investigation of the construction steel market in May, in the past May, the construction steel market such as rebars and wire rods generally showed a weak trend, prices continued to fluctuate, and by the end of May, it had fallen to the lowest level this year. However, in the last few trading days of May, there were signs of stabilization and stabilization, but the market transactions were still light and the sales were not so smooth. The reason was that the effective demand of downstream terminals was insufficient, and the power to support price increases was limited.
So, what will happen to the construction steel market in June? In this regard, Liang Taigeng believes that it is still in a period of shock and bottoming, and the situation of sharp rises and apparent declines does not appear to occur. This is mainly due to several factors:
The first is influenced by favorable factors such as “steady growth, expanding domestic demandâ€. Recently, the state has intensively introduced a series of policy measures to promote economic growth and development, such as increased investment, approval and start of a number of major projects, will stimulate demand for steel products, enhance confidence in the market outlook, thus curb the continued decline in steel prices, Or the downside is limited. However, these positive policies are actually implemented in pulling steel demand, and there is still a process that will not immediately take effect. It is expected that by July and August, the substantial effect of the favorable policies to stimulate steel demand will be expected to show. Because of the project's determination, the availability of funds, and the official start of construction, it will take time. In June, the favorable policies will not immediately drive the demand for steel products.
Second, the situation of oversupply cannot be fundamentally improved in June. From the aspect of supply and demand, some steel mills have started to cut production due to losses, but the intensity of production cuts is not great. As the price of this round of steel market continues to fall, an important reason is that the prices of billets and iron ore have fallen, and the decline rate is greater than the price of finished steel products. As the raw material market price fell, the cost pressures of the steel mills were eased, the cost was reduced, and the power output of the steel mills was not strong, so the supply was still strong. From the demand level, in this round of steel price decline, downstream end-users are mostly waiting and seeing under the psychological influence of “buy up or not buy downâ€, and the willingness to purchase is not strong, so terminal demand is decreasing in May. Less than April. From the trading volume of some steel traders, it can be seen that sales in May decreased by 20% or 3% from the previous month. In June, it will enter the Meiyu period, the downstream terminal demand will not be significantly released, the demand will not be too large, it is difficult to support the sharp rise in prices.
Third, the shortage of funds still exists and it is difficult to ease. In June, steel traders concentrated their time to repay the bank. During the New Year's Day of the Spring Festival, steel traders’ loans to the bank expired in June and required repayment. In order to raise funds, it is not ruled out that some steel trade companies will lower their prices and shipments, return the purchase price, and bring the market price closer to the bottom. Moreover, many banks nowadays have limited the amount of loans for steel trading companies, particularly steel trading companies represented by Fuzhou. Due to the control of bank loans, the funds of steel traders have become increasingly scarce. This will also curb the release of mid-end demand, which also constrains price increases.
The fourth is the influence of the external environment. At present, the European debt crisis is still serious, which once again exacerbates investor worries about the European debt crisis. ** The cost has increased dramatically and the banking system's problems remain. Although the European Commission proposed that the Eurozone establish a banking union and consider using a permanent salvage mechanism to provide financial support for the banking system, the various member states of the euro area have great differences. The market is concerned that it may take a long time to reach an agreement on this matter and it will not be able to help solve the European debt crisis in the short term.
Judging from these factors mentioned above, the favorable side of the steel market in June is also favorable to the empty side. The existence of these factors will make it difficult for prices to rise significantly and will not be able to continue falling sharply. Therefore, the current supply and demand in the construction steel market Relationship, the price may have a shocking bottoming process, the specific price trend will be in the cost of online and offline 200 yuan / ton fluctuations.
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