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Steel prices is expected to continue rising trend

Recent environmental theme continuous efforts, Jiangsu, Henan region many mills shut down because of environmental rectification, showing steel production capacity to significantly accelerate the market long confidence form a significant boost.
Agency monitoring data show that the Shanghai Stock Exchange on July 29 a total of 252,500 tons of rebar stocks late last week to reduce 02,500 tons; 52,000 tons of wire, late last week to reduce 12,000 tons; plate, screw 73,000 tons, compared with the previous reduce 03,000 tons weekend.
Data show that the 35 major steel market inventory of 3.923 million tons, up 4.8 million tons, an increase of 1.24%; wire stocks was 106.2 million tons, 1.9 million tons, an increase of 1.82%. From the national wire, steel, hot rolled coil, cold rolled coil, plate total of five varieties of stock, the national total of 8.924 million tons a comprehensive inventory, from Friday to increase 104,500 tons, an increase of 1.18%.
Insiders said that the national stock market rebound in China Hot Dipped Galvanized Steel Sheet for the second consecutive week, but the current national steel inventory levels are still down 24% year over year. Currently the industry is in the off-season, inter-terminal high-temperature heat of turnover was flat, the social stock rebounded slightly reasonable, but the absolute level of stocks still remain low, not much pressure.
The official manufacturing PMI in July 2016 was 49.9%, after a lapse of four months fell again to below the critical point. Caixin manufacturing PMI in July was 50.6 percent, exceeding the June 2 percentage points, the first time in nearly a year and a half back to expansionary territory. Manufacturing PMI showed the economy downward pressure is still large, but also increase the market for the latter to raise the expected steady growth policy.
Which was United Steel Logistics Committee survey, released by the steel industry PMI index, the index reached 50.2% in July, 5.1 percentage point rise from the previous month. From the sub-index, in July production index, new orders index, new export orders index rebounded, rising steel prices shows that with the iron and steel enterprises to enhance profitability, accelerate production release, the downstream steel industry and export demand also improved.
At the same time, analysts pointed out that in July the backlog of orders index, finished goods inventory index also appears more pronounced rebound in July displays from the Yangtze River to the northern region of heavy rain, the steel resource flows form a significant influence, a certain level of business inventories backlog.
Recently the State Council Development and Reform Commission, Ministry of Industry, Ministry of Environmental Protection for steel-intensive production capacity to be deployed, and then set off a wave of domestic environmental crisis. Recently eight central environmental inspectors group stationed provinces, Jiangsu, Henan, Inner Mongolia and other places mills environmental procedures, environmental indicators and related facilities through a rigorous review of the many small blast furnace and intermediate frequency furnace steel companies are suspend production for rectification.
In addition, the August 1, East China leading steel price policy introduced in early August, rebar prices up 70 yuan / ton, wire, plate, screw prices up 30 yuan / ton, showing the steel market outlook optimistic confidence. Continue to strengthen environmental enforcement, major mills raised prices, will help boost market confidence, boost steel prices to rise.
Analysts said that despite the current domestic steel market is still in the traditional low season, the performance end of the market demand for more light. But good macro and industry level constantly heard, overweight active fiscal policy is expected to drive the recovery in demand, environmental enforcement overweight is expected to cut supply, tends to improve market supply and demand situation is expected to short-term domestic steel prices is expected to continue rising trend.

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