The recent analysis of the monetary and credit situation by relevant financial institutions believes that domestic economic recovery still needs to maintain stable credit growth, moderate monetary growth should support high-quality economic development, help small and medium-sized enterprises and difficult industries continue to recover, and serve the revitalization of rural areas. Policies are combined to provide financial support to financial institutions by using monetary policy tools such as re-lending and rediscounting and deposit reserve ratio.
After the implementation of the overall RRR cut in July, the central bank’s recent meetings have successively stated that the comprehensive use of a variety of monetary policy tools will guide the reasonable growth of loans. With the weakening of the economic recovery momentum and the emergence of pressure to stabilize growth, the industry generally believes that the signal of stable and loose monetary policy is more obvious, and there is a greater possibility that the RRR will be lowered again in the later period.
Against this background, can the tight capital situation in the steel circulation market be improved? The traditional “Golden Nine” peak season in the steel market is coming soon, will it bring a wave of strong market?
The price of ore stops falling and stabilizes, the market may rebound
As an upstream sector, recent data on the iron ore market is worth noting. Relevant data show that from August 23 to August 27, the price index of imported iron ore stopped falling and stabilized.
According to the monitoring data of the Lange Steel Cloud Business Platform, as of August 27, 58% of the Australian powder index was US$121/ton, which was an increase of US$3/ton from last week; 61.5% of the Australian powder index was US$138/ton, which was an increase from last week. US$4/ton; 62% Australian block index is US$178/ton, down US$2/ton from last week.
During the “14th Five-Year Plan” period, the iron and steel industry must enhance its ability to guarantee resources. Recently, the Ministry of Natural Resources mentioned in its reply to a proposal on strengthening iron ore exploration and improving resource security that it will further strengthen basic geological work, increase the transfer of mining rights, promote market entities to increase investment in prospecting, and promote the revision of the Mineral Resources Law. , Improve the mining rights, reserves management and equity gold systems; innovate the prospecting incentive mechanism, explore incentives for units that provide block suggestions and successfully sell blocks; deepen the reform of geological prospecting units, and play the role of geological prospecting units in geological prospecting .
In terms of market conditions, iron ore prices have continued to fall since July, and the 61.5% Australian powder index price has fallen by more than 30%. However, the pace of steel mills’ production reduction has slowed recently, and the demand for iron ore has temporarily stabilized. This week, the price of ore stopped falling and stabilized. .
Lange Steel Research Center Wang Jing believes that under the background of reducing crude steel output, the supply and demand pattern of iron ore is still weak, and the price center will continue to move downward. However, in the short term, after substantial adjustments, the market risk brought about by the expected production reduction will be fully released. And the iron ore inventory of steel mills is at a relatively low level. With the arrival of the peak season, there will be a certain replenishment demand, which will support the price, and the market may rebound in shock.
Monetary policy will boost infrastructure
Wang Jing believes that since the outbreak of the epidemic, domestic monetary policy has maintained independence and there has been no large-scale easing. In recent months, the growth rate of major financial data indicators has fallen, and liquidity has been weak. Weak, on the one hand, are constraints on infrastructure and restrictions on real estate financing. Since funds cannot be injected into the real estate and infrastructure fields, and are transmitted and circulated through the purchase and sale chain, the steel market feels that funds are tight. Although the cash flow of individual real estate companies is extremely tight, it is unlikely that the policy will be relaxed in the face of real estate regulation. The non-performing loans rate of some banks in the real estate industry has risen. Banks will be more cautious in lending to real estate companies, which means that macro-liquidity is still difficult. Inject into the real estate sector.
But the current situation has changed. The Ministry of Finance recently released a report on the implementation of China’s fiscal policy in the first half of the year, stating that it will moderately speed up the issuance of special local government bonds, make good use of local government special bond funds, guide local governments to strengthen project reserves, and promote the formation of physical workloads at the end of this year and early next year. Support the expansion of effective investment, guarantee the capital demand for key project construction, optimize government investment arrangements, and enhance the stamina for investment growth.
She predicts that monetary policy will be coordinated with fiscal policy, through methods such as RRR cuts, and appropriate liquidity to support the acceleration of the issuance of local government special bonds, and the infrastructure sector is expected to receive more capital injections.
“Under the background of the slowdown in economic recovery, the monetary policy is stable and loose, supporting the real economy, maintaining stable liquidity, restricting real estate, and boosting infrastructure, while more funds flow to small, medium and micro enterprises in the middle and lower reaches of the industry. , As a whole, it is conducive to the stability of steel demand and the improvement of funding, which is good for the steel market.” Wang Jing said.
She also talked about the need to pay attention to the annual meeting of global central banks currently being held. “As a weather vane for the policy turning point of major central banks in the world, we need to pay attention to the policy signals they release and the expected impact.”
Can “Golden Nine” Bottom Up?
According to Ge Xin from the Lange Steel Research Center, in the 35th week of 2021 (2021.8.23-8.27), the Lange Steel’s national absolute price index is 5,711 yuan, an increase of 0.30% from last week and an increase of 39.72% from the same period last year. Among them, the absolute price index of Lange Steel Long Products was 5351 yuan, an increase of 0.47% from last week, and an increase of 37.55% from the same period last year; the absolute price index of Lange Steel Profiles was 5,670 yuan, an increase of 0.58% from last week, and an increase from the same period last year. 44.91%; The Lange Steel Plate Absolute Price Index was 5,975 yuan, an increase of 0.15% from last week, and an increase of 40.96% from the same period last year; the Lange Steel Pipe Absolute Price Index was 6,211 yuan, an increase of 0.08% from last week, and an increase from the same period last year. 39.30%.
According to the monitoring data of the Lange Steel Cloud Business Platform, in the 35th week of 2021, the price changes of 17 categories and 43 specifications (variety) of steel raw materials and steel products in some regions in China are as follows: The market prices of major steel products fluctuate and consolidate. Compared with the week, the rising varieties have increased, the flat varieties have increased, and the falling varieties have decreased significantly. Among them, 17 varieties rose, 14 more than last week; 16 varieties remained the same, 12 more than last week; 10 varieties fell, 26 less than last week. The domestic steel raw material market fluctuated and rose, iron ore prices rose by 10-25 yuan, coke prices rose by 240 yuan, scrap steel prices fluctuated slightly, and billet prices rose by 70 yuan.
Ge Xin believes that the domestic steel market is approaching the traditional “Golden Nine” peak season, but the downstream demand recovery is not obvious. The market transactions are up and down, and because the profits of the steel mills have recovered in the early stage, the steel mills are also enthusiastic about production. Increased, which prompted a rebound in the output of large and medium-sized steel companies in mid-August.
He said that since the second half of the year, the downstream demand situation has not been as expected. The real estate industry has been suppressed by policies but still remains resilient, but the infrastructure industry is far from reaching expectations. This shows whether the market demand in the peak season of “Golden 9” can recover as expected. There is still uncertainty about the arrival. “However, the Ministry of Finance recently stated that it will speed up the budgetary expenditures in the second half of the year and the issuance of local government bonds, which has brought a certain boost to the traditional peak season of demand. In the short term, the domestic steel market will show a situation of turbulence and bottoming up.”
According to data from the weekly price prediction model of the Lange Steel Cloud Business Platform, next week (2021.8.30-9.3), the domestic steel market prices will fluctuate upwards, the long products market prices will rise slightly, the profile market prices will rise steadily, and the plate market prices Steady and strong, the market price of pipes will fluctuate and rise.
In the 36th week of 2021 (8.30-9.3), the Lange Steel National Absolute Price Index is expected to be 5,725 yuan, an increase of 14 yuan; of which, the Lange Steel Long Products Absolute Price Index is expected to remain at 5398 yuan, an increase of 47. Lange steel profile absolute price index is expected to be 5699 yuan, an increase of 20 yuan; Lange steel sheet absolute price index is expected to be 5979 yuan, an increase of 4 yuan; Lange steel pipe absolute price index is expected to be 6,226 yuan, an increase of 15 yuan. (China Finance Network)