3.0mm hot rolled coil prices reported 2320 yuan / ton, 2760 yuan / ton, in a total of one and a half month,price rose 320 yuan / ton and 220 yuan / ton. We must ask, Steel City really will recover soon? people of  Steel trade circle should feel the demand is still tepid, but because of the early Songane wide policy underpinning infrastructure investment, demand contraction intensity than the previous two years has eased. Economy in the second quarter continued the steady growth in the first quarter, GDP grew 6.7%.

 

First, July 14, the NDRC spokesman Chen Zhao Xin introduced in 2016 Yajian crude steel production capacity of around 45 million tons to complete, quit coal production capacity to reach 250 million tons or more, provinces and autonomous regions did not complete the task, will be seriously accountability. So I was shocked, "five" during the phase-out of the national total steel production capacity 94.8 million tons, while in 2016 planned phase-out of the previous five years accounted for nearly half, were stronger than ever. "Thirteen Five" period, China plans Yajian crude steel production capacity 100 million -1.5 million tons.

Secondly, unlike in previous years, this year the domestic steel production rhythm control improved, the phenomenon of cut-throat competition eased. So I feel deeply that this year once the steel mills at a loss, as in previous years no longer hold down costs through large-scale production, but moderate control of the production rhythm. Of course, strengthen environmental remediation efforts around, but also play an inhibitory effect on the capacity expansion, especially to a "limited capacity measures" Tangshan mills from time to time.

This week (ending July 15, 2016), Tangshan steel production capacity utilization rate fell from 1.12 to 86.03%, due to sintering stock reason, the individual began to overhaul blast furnace steel mills, is expected next week, most manufacturers or stew stove, Tangshan Steel sintering plant faces shutdown of 50% or blast furnace stew phenomenon.

Again, force supply-side reform, particularly the elimination of backward production capacity, and will not get instant results, it is a long-term-oriented tasks. Then push short-term steel market bullish enthusiasm, no doubt improve the prospects for the steel industry to attract capital inflows, especially speculators. Meanwhile, the British off in Europe, coupled with moderate growth in the US dollar index still ascribed power, passive devaluation of the RMB assets triggered safe-haven demand, while commodity prices are at historic lows, attracting funds from various quarters into commodity futures markets.