Comprehensive performance of various varieties, the current stage of the market spot resource cost is still strong

Comprehensive performance of various varieties, the current stage of the market spot resource cost is still strong, but due to the uncertain situation in Russia and Ukraine, energy and bulk commodity raw materials are still strong, the cost of domestic production enterprises is relatively high, so for timber, its cost support is strong. In addition, recently, as the resumption of production slowed down and tended to be stable, the situation of concentrated demand volume decreased, and the uncertainty of the superimposed financial disk also led to some regions with relatively large inventory of resources began to rush to cash out. The government work report sent a positive signal of steady growth. The report set a GDP growth target of around 5.5 percent this year, higher than the average growth rate of 5.1 percent in the past two years and a medium-high growth rate based on a high base. We estimate that GDP growth in the first quarter is likely to be around 5%, which means higher growth in the next three quarters will be needed to achieve the annual target, and measures to stabilize growth will be further intensified. This year’s issuance of special bonds will be 3.65 trillion yuan, the same as last year. Considering that the figure was extended to 1.2 trillion yuan this year, the actual amount will be larger than last year’s level, which will facilitate investment in major projects and infrastructure. In addition, the total supply and growth rate of monetary policy basically matched the nominal economic growth rate, the increase of fiscal expenditure by 2 trillion yuan and no specific target for energy intensity were set. All these show that the core of current economic work is to maintain steady growth. Positive recent market is also gradually appear, it is the demand side began, steel inventories from up to down, the home of steel investigation of steel total inventory of 26 million tons, 810000 tons less a week earlier, the main varieties of steel trading volume continued rapid recovery, after the two sessions, the early focus on projects will enter the construction phase, the strength of demand will increase; Second, the cost side support is strong. The price rise of iron ore and coke pushed the cost of long process to rise sharply, which has been basically equal to the cost of short process. In the context of demand growth, the demand for raw fuel procurement of steel mills will not weaken. Third, the external environment is relatively good. Since the Conflict between Russia and Ukraine, the international industrial chain has been impacted, and the price of overseas steel has risen sharply, increasing with that of the domestic market. Overall, it is expected that domestic steel market prices will continue to rise mainly by shock. Focus on steel production, destocking intensity and policy adjustment. At present, affected by a variety of complex factors, the domestic steel market presents a substantial shock. From the perspective of the international situation, due to the impact of the Conflict between Russia and Ukraine, the international energy market showed a trend of rapid surge, and also caused the large fluctuations of the international and domestic commodity markets. From the domestic environment, steady growth policy is in be born in the process of gradually, since the beginning of this march, part of the engineering machinery manufacturing enterprises appeared in the single “phenomenon, reflects the early stage of the project throughout the country demand, the procurement of downstream demand is expected to strengthen gradually, but at the same time as the international commodity prices high again, Rising cost pressures for domestic steel producers are also more pronounced, which will limit the intensity of steel capacity release to some extent. In the short term, the domestic steel market may present a range of shocks.

Post time: Mar-14-2022