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Two Sessions Effect "warm up" Steel Market in May

2020-07-03 13:44:49
The steel market has always been said to be "gold March, silver April, silver and black May", but this year, affected by the new coronary pneumonia epidemic, domestic transportation and logistics were once interrupted, and steel trade was blocked. In the first quarter, problems such as high steel inventories, a sharp drop in downstream demand, and a sharp decline in corporate profits have plagued steel companies, and the “Golden Three” has thus become a bubble. After entering the second quarter, thanks to the continuous introduction of the national hedging macroeconomic downward policy and the continuous acceleration of the national resumption of production and production, the downstream demand in the steel market began to pick up, and the steel stocks also continued to decline for 2 consecutive months, but considering that this is the market After the deep fall, "Silver IV" was inadequate. From the past experience, with the arrival of the rainy season in the south, steel demand usually begins to shift from a phased peak season to a phased off-season after the May Day Labor Day, and steel prices are mostly operating weakly, so there is a "black five" statement .

Affected by the epidemic this year, downstream demand has been delayed, and the holding of the two sessions of the country has been postponed to late May. As the time of the two sessions of the country is approaching, the effects of the two sessions will bring multiple benefits, blowing a burst of warmth into the steel market, which will strongly boost the confidence of the market and downstream industries.

Finally, the contradiction between supply and demand ushered in a phased relaxation. It is not difficult to find that every year the two sessions of the country are accompanied by an "environmental protection storm." To ensure the air quality during the two sessions, some steel companies need to stop production during this period. After entering May, some production lines of local enterprises such as Hebei Jinxi Iron and Steel Group and Tangshan Jianlong Special Steel Co., Ltd. suspended production. On May 18, Fengrun District, Tangshan City, Hebei Province continued to tighten air pollution control measures, stipulating that some production lines of some iron and steel enterprises should stop production from 8:00 on May 18 to 24:00 on May 31. This has reduced the market supply pressure to a certain extent, superimposed factors such as continuous decline in inventory and accelerated release of demand. The market supply and demand contradiction has gradually eased, and steel prices have risen slightly under the influence of this is also expected.

On the whole, under the favorable expectation of the National People's Congress and the National People's Congress, the steel market sentiment has been repaired, but the problem of insufficient demand is still obvious. To this end, steel companies should take advantage of the synergy effect of the industrial chain, and timely track the demand information of downstream industries. After the government work reports issued by the two sessions of the country this year, they will promptly look for the steel opportunities contained therein.
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