"Real Estate Restrictions" Causes Steel Prices to Rise

With the successive introduction of the “new eight countries” detailed rules, starting from this week, the steel prices that have been rising since December 2010 began to brake. Due to the cautious effect caused by the regulation of real estate, steel traders started dumping goods, steel prices fell in an all-round manner, the spot market's decline has expanded, and the main market has experienced several downward adjustments.

Property regulation leads traders to dump goods

From February 14th, the spot market began to experience a tentative decline, followed by a number of cities joined the decline in the ranks, in February 16 began to show a general decline in the country, and yesterday (February 17), steel, electronics There was a deep drop in the market and the spot market has also seen a bigger drop.

A steel trader in Chengdu told a reporter of the “Daily Economic News” yesterday that the real estate control policy was so severe that steel prices would still fall for a while. He intended to sell some of the goods to go home for the Lantern Festival. It is understood that the emergence of low-cost sell-off has also made the mainstream price of the steel market has been continuously pulled down. On January 16th, Beijing issued a stringent policy on the regulation of the property market, requiring foreigners to provide five-year tax payment certificates for purchases, limit purchases to the recognition of housing, and excessively differentiate the developers’ pricing and costs.

In response, Zhou Xizeng, an analyst at CITIC Securities, said that the panic-stricken rejection of the steel market was triggered by market expectations as a result of real estate control policies. The early rise in steel prices was too large and should have been at a correction phase. Since December last year, this wave of steel prices has risen by 300 yuan to 400 yuan/ton, which needs to be adjusted back to digesting gains.

For the ** market, Lange Iron and Steel ** analyst Chen Guanda analysis, overnight outside the plate metal fell, retail investors in tentative shorting, rebar main volume decline, once fell below the 5100 yuan integer mark, and finally to 5,018 yuan / ton to close Compared with the previous trading day (16th), the settlement price fell by RMB 89/t.

Analyst: Steel prices are still bullish in the medium term

However, analysts believe that after a short fall, the medium-term bullish view of steel unchanged. "Despite the introduction of the purchase restriction policy, steel demand will not be reduced." Zhou Xizeng said that the current real estate control policy is only to limit investment and speculative purchases, and will not stop the construction of houses. On February 16, the Ministry of Industry and Information Technology announced the “2010 Steel Industry Operation and Outlook for 2011” article, which stated that due to the rigid demand, the apparent consumption of crude steel in China is expected to reach 630 million tons this year, and crude steel production will increase. It reached 660 million tons, which is expected to increase by 5% year-on-year. In 2011, China's net export of crude steel was the same as in 2010, under the policy guidance that steel products meet the needs of the domestic market.

Chen Guanda said that due to the support of bullish factors such as steel demand for 10 million sets of affordable housing in 2011, it is expected that the target position for rebar 1110 contracts will be at 5,300 yuan/ton in the first quarter until the spring season of steel consumption is gradually approaching, and the demand for downstream steel products will be driven. Steel prices are expected to rise again.