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Steel demand will continue to be resilient in the second half of the year

 2019 will be the first year after the steel industry completes the "13th five-year plan" to cut overcapacity. It has become the top priority of the steel industry to continue to deepen supply-side structural reform, promote transformation and upgrading through optimizing the layout and industrial structure, and achieve high-quality development.

 

In the first half of this year, China's economy maintained the general keynote of seek improvement in stability and maintained steady economic development in the face of complicated domestic and foreign situations.At the same time, China's economic development is increasingly showing high quality characteristics.The steel industry continues to maintain good performance on the basis of continuous supply-side structural reform, providing important raw material guarantee for the smooth operation of the national economy.

 

Overall, in the first half of this year, China's steel production continued to increase, steel demand maintained steady growth, supply and demand boom;Steel prices have risen and fallen, and remain stable overall, but slightly lower than the same period in 2018.

Follow the demand to grasp the production rhythm

 

To sum up, in the second half of this year, from the leading indicators of various industries, the real estate investment showed a slight trend of decline, but the real estate investment itself has a strong resilience, is expected to play a slightly weaker role in driving the demand of the steel industry than in the first half of this year, and is comparable with the same period last year.In terms of infrastructure construction investment, the growth rate of infrastructure investment in the first half of this year is stabilizing. With the follow-up infrastructure "strengthening weak spots" projects concentrated, and the positive impact of special debt on infrastructure project financing, it is expected that the infrastructure investment in the second half of the year will be significantly better than the first half, which will play a certain driving role in steel demand.In other downstream industries, machinery industry, automobile industry, shipbuilding industry and other declining trend is still, should not have too high expectations, even if there is more than expected growth, the pull effect on steel demand is a little lag, limited impact.In general, real estate investment will continue to be the support of steel demand in the second half of the year, which is the core factor affecting steel demand. Infrastructure investment may be "icing on the cake", so steel demand will continue to remain resilient.It is expected that steel demand in the second half of 2019 will be weaker than that in the first half of the year.

 

 

It is important to note that in the first half of 2019 crude steel output in the same period in 2018 increased by more than 10%, given in the first half of the real estate market to support demand, steel prices are relatively "good-looking", continue to "stall" but if the second half of the production, supply and demand is expected to face bigger contradiction, similar to last year, steel prices in November in the case of "moving" will appear again.Therefore, steel enterprises should pay close attention to the development of regional market real estate and other key steel industry, observe the inventory changes at any time, and then grasp the production pace, continue to ensure the healthy and stable operation of the steel industry in the second half of the year.

Tianjin Pengbo Steel Co.,Ltd    Tianjin ICP for 15004377   Background management