Steel prices are facing downward pressure in 2019

In 2018, thanks to the overall stable and steady growth ofChina's economic operation, steel consumption in major steel downstreamindustries such as real estate, home appliances, shipbuilding and machinerycontinued to grow. In 2019, the demand for steel downstream industries will bedifferentiated, and demand in some industries will increase steadily, anddemand in some industries will decline slightly. Among them, the growth rate offixed assets investment and real estate investment may fall, the development ofthe automobile industry faces an inflection point, and the demand for steel ininfrastructure construction and machinery industry will continue to grow.

As an important industry affecting the consumption of rebar,in 2019, real estate investment is facing downward pressure. From a policyperspective, the Central Economic Work Conference held on December 21, 2018pointed out that it is necessary to build a long-term mechanism for the healthydevelopment of the real estate market, and insist that the house is used forliving, not for the purpose of speculation, because of urban policy,classification Guidance... Under the premise that the real estate control policyhas not been relaxed, this year, real estate investment and new constructionarea of ​​housing are facing obvious downward pressure, and the pulling effecton steel demand will be reduced. However, if the real estate industry continuesto decline, there will be partial loosening of the regulatory policies.

On the whole, in 2019, the contradiction between oversupplyin the steel market still exists, steel prices are facing downward pressure,and the price center of gravity will move downward. However, due to the strongprice of raw fuel, the support of cost will increase, the price of steel willnot fall sharply, or it will fluctuate around the cost line, and there will bea phased rebound under the influence of policies such as production restrictionand consumption start-up.