The Current Economic Status Impacts China Steel Prices

Since the outbreak of the financial crisis in 2008, it continued to spread and deepen. The problem of a country's total steel consumption, it has a continuous. Currently, the global steel overcapacity problem is very serious, and want to excess capacity eliminated the need for many years. Excess capacity is a global problem, and is also an important factor in the steel trade-distorting. For China, could also be too large, steel prices cannot be sustained stabilization and recovery, the growth in demand for steel, even if it is a low-growth may not be able to bring about the growth of the steel, the profits from the products. The confidence comes from the steel consumption, industrialization prior to the completion of at least the next 10 years, should be a growth momentum was maintained, but must be a low-growth.

As the representative of the European and American countries, they are the center of consumption, the center of the capital output operation of so-called reform and innovation go too far, a bubble. Developing countries in the past ten years to become the world's manufacturing center in China, the cost advantage of developing countries to developed countries transport cheap goods, their consumption of transition. We export them out of the problem by the impact of exports and the corresponding affected many areas of production appeared excess. Get a lot of the profits of the assets mainly export-oriented country, by the original export. Brought them? Their own currency appreciation and undermine the international competitiveness of other industries in their own future appreciation when the three issues need to be adjusted, the adjustment process is a fairly lengthy process. China, for example, these years of us rely on the boosting of exports to GDP pulling now export problems, domestic demand needs people continued to increase revenue, improve spending power this form of adjustment is a long.

Steel industrialization support industry, secondary industry in the process of industrialization is the highest, the entire secondary industry in the national economy dominant process is the process of industrialization, industrialized secondary industry what is the construction industry and industrial composition. GDP growth in the process of industrialization first contributor is the second industry, the development of the secondary industry must bring consumption. Is the fastest per capita steel consumption in the industrialization process of the mid-to late industrialization must be from high growth to low growth. To a post-industrial society overall steel consumption will fall from the peak. It will continue to fall after a long time.

For steel situation in 2013, we believe that steel suppliers and production and consumption still have confidence, but we must fully understand that it is a low-growth, because the GDP in 2013 will this year. The tone of monetary easing should also be sustained. Especially a steady growth in new infrastructure projects will encourage investment to stabilize. After about 4-5 trillion out, especially the last two years on infrastructure, investment in fixed assets is highly controversial, but now look at the central government put forward, steady investment is an important measure of steady growth.

Generally speaking, it is a new year for Steel production in 2013, although, we also meet all kinds of problems, the economy of world is becoming better and there will be more good policy for Steel development in China, therefore, as long as we believe, whatever steel products like steel coil, steel pipe, steel sections, angle iron, ERW pipe, Galvanized Steel, etc, the prices will be proper level.