The Truth of The Steel Price Fluctuate In China 2016

In the past 90 days, the steel market price in China is rarely rose and dropped suddenly and sharply.

With this price rising up, more and more factories start to reproduce, and only in the past 1 month, the production per day is around 96 million tons, with this production rate, the yield of 2016 is going to surpass 2015.

The unpredictable steel price creates problems, the manufacturers can not predict the future, they can not plan, which make the cost is uncontrollable.

An analyst from economic says this round of price fluctuates, its more like speculation dominated, during this month, June, bull and bear, these two powers start their competition.

What are the Steel Manufacturers Thinking about?

Which the price of rebar raising on 7th March, and it reaches to the peak on 21st April, but the atmosphere is still very tense.

Guofeng, as the biggest private manufacturer in Tangshan, they keep buying raw material for insurance.

But not like private companies, the state-owned companies they are not doing anything when facing this turbulence market, they are all afraid of making mistake, and can not predict the future, can not plan anything.

In the steel futures market, the manufacturer's attendance rate is very low, and the trade volume is small, the ability to use financial tool to hedging risk is still low in China.

The Truth about the Steel Price Fluctuate

This round of rising and dropping is developed by two phrases, the first phrase is supply insufficient, demand flourishes surpass the market prediction, make the supply and demand mismatch, which raised the steel price, then comes the second phase, because of the first phase, more and more trading companies and investments come into the market, the market is very active, which makes the prompt goods and futures good work together bulling the market, with a month of price rising, the steel manufacturer thinks the market is warm and back, they start production again, the in the end of April, the production gets to the peak, the supply and demand structure is totally changed, then price dropped down in may.

There is another reason, the stock market is bear, which makes the futures market attracts more investment, and only the black metal in the bulk commodity does not have foreign stock, and at the beginning of this year, the metal price is in the valley, then most the big investment get into the steel futures market.


Steel making process