Wu Wei, Dean of Dongling Group's Black Commodity Research Institute, pointed out at the forum on March 23 that the steel market is currently at the end of the upward cycle since 2015, and the subsequent recovery of steel production is also difficult to reflect the promotion of imported iron ore consumption. effect.

Wu Wei believes that with the frequent occurrence of the "black swan" incident in the global market and the large decline in various assets, rebar futures have come out of a relatively independent market. The reasons are as follows: First, steel companies are restricted by raw material reserves and inventory pressure of finished products, and actively adjust production. The reduction in scrap steel has reduced steel production, which has led steel mills to actively reduce production without profit losses. Second, the epidemic situation of China's new coronary pneumonia has been relatively well controlled, and exceeded market expectations at the time.

"In February, there is a huge disagreement on whether the market's steel demand can be restored in April. Optimists think it can be restored to normal levels, and pessimists think it can only be restored to about 70%." Wu Wei said. At present, demand recovery is still good. The important reason is that China's new coronary pneumonia epidemic has been relatively well controlled.

However, he also emphasized that short-term steel demand is acceptable, but should not have too high expectations. Judging from data such as comprehensive construction site construction, cement construction, and power generation, actual demand is not as good as imagined. This may be caused by the centralized procurement brought about by the concentrated construction of the construction site. At the end of last year, everyone was very pessimistic about the market's expectations. Many construction sites did not dare to stock up, which meant that the subsequent demand was acceptable, but it would not be very strong.

Wu Wei said that after the rebar price rebounded from 3,000 yuan / ton to 3,600 yuan / ton, the market believes that there will be further economic policy stimulus in the country, and the expectation of infrastructure is very strong; but when the market sends hope for the continued upward price When the large-scale policy stimulus, it contains the concept of being at the end of the cycle. The economic stimulus is restricted in two ways, one is its own debt constraints, and the other is that it is difficult for foreign epidemics to end in a short period of time. The reduction in foreign demand will lead to the accumulation of domestic industrial product inventories and more structural problems in the medium term.

In addition, when the profit of the long process steel mill is higher than the profit of the East China short process steel mill by more than 500 yuan / ton, then the latter has more profit and power to produce at full capacity.

Wu Wei also said that considering the current status of prevention and control of outbreaks abroad, it is difficult for the world to end the outbreak by the end of May. Even if the epidemic situation in some countries is improved, it still cannot produce very good expectations for the global entity level. The prerequisite for effective control of the epidemic is control, which itself will have a greater impact on the real economy, which may affect the import and export of steel products.

With regard to finished products, from the experience of 2008, the pressure of hot-rolled coils is easy to highlight. At present, many foreign auto manufacturers have reduced production. Rewinding the price difference of coiled snails and import and export amounts in 2008 can be seen At that time, there was a very obvious decline. Even in November 2008, the price difference of the spiral snail reached a very extreme -800 yuan / ton.

“At that time, Guangzhou ’s plate exporters (terminal exporters) faced contract breaches, which are currently somewhat similar. The country first suffered some shocks caused by the epidemic, and then suffered some shocks from foreign epidemics. The inside is in a negative state, which generates a lot of pressure on the coil. "He said.

However, Wu Wei emphasized that the steel industry is unlikely to deteriorate to the state of 2015. After all, after several years of supply-side structural reforms, the asset-liability ratio of many companies has continued to decline, and the supply side has higher adjustment flexibility.

Regarding the expected future trend of iron ore prices, Wu Wei believes that with the recovery of terminal demand, the output of steel products can indeed increase later, but much of the increase will also come from scrap steel and domestic mines, as in the first quarter. The decline is also caused by these factors. Therefore, the subsequent increase in steel output is actually difficult to reflect the promotion of imported iron ore consumption. At the same time, with pressure on epidemic management and economic growth, foreign steel companies in the United States, Japan and Europe began to cut production.

"From a global perspective, the element of iron has begun to weaken marginally, and it cannot be ruled out that there is a periodic global surplus of iron. However, the point to be guarded against is whether the epidemic will affect iron ore in Brazil and Australia Production and shipping. This still requires dynamic tracking. "Wu Wei said.