Slowing Down of Domestic Iron Industry

Steel production enthusiasm has receded. In June, the index was 42.5% iron and steel industry production, dropped 11.2 percent last month, the index dropped again after a lapse of two months to less than 50% of the ups and downs of the line, and the two fell even this year lowest point. At the same time, production-related procurement activities also shrank trend. With the expansion of the industry loss, the impact of lower demand and the downturn in Tangshan environmental factors such as limited production, steel production enthusiasm is declining, the latter domestic steel production will continue to fall.

Furthermore, as the consumer market into traditional off-season, high-density rainfall and busy construction schedule so that downstream of slowing down, the amount of steel terminal market and therefore greatly reduced, circulation enthusiasm orders also decreased, steel orders increased tissue pressure . From a market point of view, June market gradually transferred off-season demand, around the hot and rainy weather increases the formation of a greater impact on the construction, the terminal needs to be weaker overall.

The cost of supporting efforts in the steel industry has been enhanced. In June, the steel industry, the purchase price index fell sharply trend continued last month, down 10.5 percentage points to 50.4%, but still in expansionary territory, showing the cost of steel companies remained high, the cost of steel support efforts It has been enhanced. Grade of 62% Platts iron ore index is currently at US $ 55 per tonne, up $ 5.1 MoM. Overall, the current iron ore supply increased, demand has weakened, iron ore prices continue to rise, lack of motivation.

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