INDUSTRY NEWS
Steel capacity enters the stage of reducing the stage of reduction
According to the China Iron and Steel Association, the steel industry in 2019 is in better demand, with steel consumption expected to be about 880 million tons in 2019, up 6% year-on-year. Although the steel market in 2019 is still good, but looking forward to the longer-term market outlook, China's steel production capacity has entered the stage of quantitative development, steel demand is expected to increase slightly in 2020, up 2% yoy. The lower growth rate is close to previous estimates by the World Steel Association, which is forecast at 1 per cent.
China's steel demand growth will slow down in 2020, production capacity release is larger, supply over demand trend is obvious. At present, domestic steel production capacity is at the peak of release, mainly due to the steel industry in the past few years under the influence of "de-capacity" policy, is in a new round of adjustment period. In addition, the problems of rapid capacity release in 2019, sharp increase in iron ore prices and increased environmental pressure will continue in 2020. 2020 real estate market to "steady" mainly, the future impact of the steel industry's development of the main factor or environmental protection. The China Iron and Steel Association will promote differentiated "environmentally restricted production" and "wrong peak production", accelerate the transformation of ultra-low emissions, and promote the further optimization of environmental classification control programs.
Due to the shortage of natural gas energy supply after the end of the "coal-to-gas" production enterprises, and the price of natural gas continues to rise, the production cost of narrow-band has increased, coupled with the tightening of low inventory and supply end, the price of belt steel is still showing a sharp upward trend, so in the long-term trend of reduction, Even if domestic steel demand falls to about 500 million tons by 2030, it will still be a big number, and China's steel industry is firmly in the world.
In short, the comprehensive environmental inspection, coal-to-gas, limited production and other factors, the steel market in 2020 will continue to continue the situation of supply and demand double contraction, but the contraction of supply may be greater than the contraction of demand, which is expected to form a better support for the belt steel market.
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