Steel prices have room to rise during the year
The 2017 (Eighth) China Ferroalloys Convention, co-hosted by Zhengzhou Commodity Exchange, China Ferroalloy Industry Association and International Manganese Industry Association, was officially hosted by Hangzhou Dietek Zhejiang Hotel. Wang Jianhua, chief analyst at Shanghai Steel Union, delivered a wonderful speech at the conference on how the supply-side structural reform can help the steel industry return to value.
Wang Jianhua believes that after the National Day, the steel market opened a new round of upward shocks.
In 2017, the global economy will continue to recover. With the improvement of our exports, the steady growth of investment and the growth of consumption, the liquidity will not exert much pressure in the short term. "In the medium and long term, the long-term economic downturn is easing pressure."
From the price point of view, Wang Jianhua pointed out that the macroeconomic expectations are not optimistic that the premiums are still high, requiring improvement in fundamentals to repair; from an investment point of view, the profitability of steel mills, opportunities still exist.
Further analysis of the current situation in the steel industry, Wang Jianhua said the cycle of switching ushered in the return of steel industry value. In the new year of politics, demand for steel-related downstream industries such as real estate and infrastructural projects has been boosting rapidly. The situation of environmental protection and high pressure has made the supply and demand weakening. This is expected to affect 10-20 million tons of steel products and affect 30-50 million tons of steel supply.
In his view, the steel market supply shows signs of a gradual decline, but there is still a gap between the varieties. He estimates short-term coal coke prices still have room for reduction, and iron ore prices are relatively firm. "In fact, the current steel price from the balance of supply and demand is very rational point of view." Wang Jianhua said he also forecast steel prices in the medium and long term value return, prices fluctuate around the value of the year; in the good-policy over-expected fundamentals Will also guide the steel prices have room to rise, but during the period there will be fluctuating price performance.
Wang Jianhua as a senior researcher in the industry also gives the policy recommendations for the development of the industry.
He believes that the current high steel mill maintenance time has exceeded the seasonal changes in the cycle, but the entire industry sales profit margin is still not high, below the average level of the major industrial sectors, the steel industry in the future "crisis" and "machine" coexist .
He reminded steel companies should pay attention to actively improve the balance sheet, from June to December the maturity of bonds, black smelting bonds maturity is the largest, there will be more than 110 billion yuan expire; accelerate the development of complex talents; Strengthen the orientation and goal of positioning enterprises; strengthen management and control of business risks and big data decision-making; strive for reform and reduction of backward production capacity; establish a normalization and restriction mechanism; ensure that domestic enterprises enjoy preferential treatment of the dividends; guide enterprises to speed up mergers and acquisitions and optimize industrial distribution and The adjustment of corporate structure; the closure of black night plate to enhance investor risk education; and suggested that the relevant departments let go of enterprises operating independently in accordance with laws and regulations to minimize the disturbance caused by the introduction of unnecessary temporary policies