Recently, Ren Qingping, chairman of Shanghai Wubo Steel Structure Materials Co., Ltd., said in an interview with China Metallurgical News that despite the recent rapid decline in steel market prices, traders’ sales are generally not smooth, but they face the market. Changes must be adjusted to the mentality, full of confidence, and it is expected that the "steel demand" intensity will not be significantly weakened in the later period.

Aspects of factors affecting steel market

In terms of cost, in the first quarter of this year, the price of steel raw materials rose sharply, which led to an increase in the production cost of steel mills, a contraction in profits, and a strong willingness of steel mills to increase the price of steel products. This is beneficial to the later steel prices. Stabilize.

From the perspective of supply and demand, environmental protection and production restrictions still have a greater impact on the steel industry. Recently, Tangshan City, Hebei Province, implemented the "Tangshan City Key Industry 2019 to the third quarter of the peak production implementation plan", clarifying that the scope and intensity of production in May will be greater than April. This will, to a certain extent, curb the release of steel production capacity, affect the supply of the steel market, and will also have an impact on the “steel demand” of end users. For example, construction projects have been rectified or shut down due to problems such as dust, noise, and air pollution. In some areas, the pollution control level of local metal casting manufacturing enterprises has been comprehensively upgraded, and all production workshops are required to be fully enclosed.

In addition, the company's external migration has an indirect impact on steel demand. In recent years, there have been cases in which companies have moved to countries and regions with lower production costs. At present, some low-end sub-product manufacturers, such as electronic products, small household appliances and other manufacturing enterprises are gradually increasing. The construction of industrial plants, logistics, warehousing, warehouses and other supporting facilities required by these enterprises requires a large amount of steel, while manufacturing enterprises such as electronic products and small household appliances consume steel in the production process.

From the perspective of exports, due to the slowdown in global economic growth this year and the impact of Sino-US trade frictions, it is expected that the downward trend of China's steel exports is the general trend. A few days ago, the United States announced that it would impose tariffs on China’s 200 billion US dollars of Chinese goods. This will have a greater impact on the market mentality in the short term, and it will be difficult for steel exports to rebound sharply.