INDUSTRY NEWS
August 6, 2019 News
The global steel market has been "splintered" by the United States to impose tariffs, and has fallen into a state of oversupply. In the first half of 2019 (January to June), global crude steel production hit a record high due to the increase in production in China, the largest producer. In the United States, which closed the market, the domestic steel companies once increased production due to the decrease in imported steel, but they have to take countermeasures because of the sluggish domestic demand.
According to "Nihon Keizai Shimbun", the statistics compiled by the World Iron and Steel Association before July 29 showed that global crude steel output from January to June increased by 4.9% from the same period of the previous year to 9.2506 billion tons, a record high. China, which accounts for half of global crude steel production, increased by 9.9% to 492.16 million tons, the highest in history.
The report pointed out that Turkish and Russian-made steel, which cannot be exported to the United States due to tariffs, pose a threat to the European market. British steel company, the UK's second-largest steel company, filed for bankruptcy protection, and ArcelorMittal, the world's largest steel company, was forced to cut production. The United States, which sets tariff barriers, is also affected. Due to the addition of tariffs, US steel imports in 2018 decreased by 12% year-on-year.
According to reports, the Organization for Economic Co-operation and Development analysis said that under the stimulation of increased production in Asian countries such as China and India, the global crude steel production capacity will be expanded by up to 5%. Yamaguchi, a senior analyst at SMBC Nikko Securities, said that "global steel is clearly in a state of oversupply."
According to the report, in the context of oversupply, the market may be fragmented, which may lead to a colder demand. President Hashimoto Eiji of Nippon Steel said that “as long as the trade war continues, this risk will always exist” and show vigilance against the new round of “steel winter”.
In the market, today's futures oscillated downward, and the market mentality further weakened. The market turnover was relatively light throughout the day, and the daily turnover of large households was only about 400 tons, and the transaction was mainly based on low prices. Among them, the prices of Shaogang and Baosteel resources are relatively firm, but the transaction is difficult. In terms of resources, due to the recent replenishment of northern timber and the fact that the resources of Handan Iron and Steel have not yet arrived in batches, some traders have been in short supply in some specifications. However, considering the poor demand, they can only make a small decline. On the whole, the current market demand is weak and there is no obvious positive release. It is expected that the price of Guangdong plate in the short term will continue to maintain a weak shock.
This week, the tinplate market was generally stable, and some market resources were slightly adjusted. The overall transaction was general. Specifically, upstream: During the week, the spot hot coil market continued to rise, and the inventory increased, and the social library increased by 43,400 tons. Downstream: Downstream companies have recently received orders. Baosteel, Shougang and other state-owned enterprises have achieved similar production and sales recently. Private companies such as Kema and Zhongyue have maintained normal orders. As the cost of raw materials continues to fall, the production cost of Makou is reduced, and downstream cans are connected. The single price has increased from the previous period. In the spot market, the spot market of tinplate is less in the near future. After the terminal demand is fully launched, the market trading atmosphere is relatively strong, and the market spot is relatively small, mostly based on futures, and partial shortage is more obvious. In addition, Baosteel and Meishan Steel's tin/chromium futures prices in July 2018 were raised from June, and Baosteel's tin-plated CA, Meigang and chrome-plated prices were raised by 100%. In addition, Baosteel's recent base price is flat, production and sales are balanced, and some specifications are relatively out of stock. In summary, in the short term, the tin plating market is still stable and stable.
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