Category: Money Tips Date: 2006-11-18
Of the State Council Development Research Center of the Ministry of Industry, "China's industrial development follow-up study," Task Force
Project Leader: Feng Fei Liu Shijin
â–?2006 full-year growth of steel demand will continue to slow, the situation of supply exceeding demand in the steel oppression, most steel products prices is difficult to reverse the pattern of short-term, not very optimistic about the market conditions.
â–?2006, oil prices will enter a downward spiral, and may generate a new equilibrium point; efficiency of the sector pattern will change, thus bringing new investment opportunities.
An oversupply of steel prices softening of oppression
Slowdown in steel demand for the full year 2005 of various sectors of China's total demand for steel will reach 306 million tons, more than in 2004 30.258 million tons, an increase of 10.98%, steel demand continues to maintain rapid growth, but lower than in 2003 24.06% and 13.34% of the growth rate in 2004. Construction, machinery, household appliances, automobiles, railways and other major steel industry, the economy was back in 2005 the main reason for slowdown in steel demand.
According to the State Council Development Research Center of the completion of the "Chinese steel demand (domestic) forecast model" analysis of all industries is expected in 2006 the total demand for steel will reach 336.8544 million tons, an increase of 30.9612 million tons, an increase of 10.12%, compared in 2004 and 2005, growth continued to fall.
Domestic steel consumption from the monthly view, June, October, November, December the peak demand for steel, respectively, 30.3176 million tons, 29.5415 million tons, 29.6232 million tons, 34.6761 million tons. From the quarter point of view, the fourth quarter is the peak demand of steel, steel demand for 93.8408 million tons, followed by the second quarter, demand for 85.3064 million tons of steel. The second half of the amount of steel was significantly higher than that in the first half, but a quarter of the fastest growing, needs most.
2006 slowdown in domestic steel demand growth is mainly due to the macro-control under the influence of lagged effects of slower economic growth and fixed asset investment growth slowed, most of steel industry, demand for steel growth have continued to fall.
The construction industry, machinery industry, appliance industry, oil and gas, automotive industry and other sectors of the increase in steel in 2006 than in 2005 is expected to decrease to varying degrees; the shipbuilding industry of steel demand growth is higher than expected this year; container industry and the railway industry, demand for steel will continue to decline in recent years, the demand trend. Buildings, machinery industry, is still the two main steel throughout the year amounted to 231.569 million tons of steel, in the proportion of total steel demand to reach 69%; construction of steel is reached 180 million tons, an increase of the contribution rate 58.98%.
Sub-species point of view, rolled products and extrusions of steel consumption is still the main species, followed by wire. Combined data for the year 2003-2005, the market demand for rolled products and extrusions in the proportion of increasingly high proportion of wire and tube is declining.
Iron and steel production capacity to continue to release
A faster growth rate of raw material supply
It is estimated that 2004 domestic production capacity of additional 73.4 million tons of pig iron, crude steel production capacity of additional 74 million tons; estimated that by the end of 2005 the national pig iron production capacity can reach 320 million tons, crude steel production capacity of 3.4 million tons. Iron and steel enterprises in 2005 by a larger expansion of capacity constraints, including funding conditions, restrictions and government inspection of iron and steel projects, some may be delayed production schedules, some of backward production capacity will be eliminated, it is expected that in 2006 the national pig iron production capacity could reach 3.5 million tons, crude steel production capacity of up to 3.6 million tons.
Raw materials, since the momentum of growth in domestic demand for iron ore imports continue to slow down iron ore imports increase in the future is not, with the introduction of the first half of the country's macro-control policies on the impact of the steel industry has grown increasingly apparent, the future iron and steel production by speed gradually slowed down, China's strong demand for iron ore growth momentum will also be gradually brought under control. Introduced in July of this year's steel industry policy that China's steel industry growth rate stabilized, there is no supply of iron ore resources in question. Iron ore production is expected in 2006 is expected to reach 448.6583 million tons, an increase of 15.51%. In addition, the coke production continued to maintain a big increase in coke production is expected in 2006 is expected to reach 235 million tons, an increase of 3.29%, an increase has dropped slightly, but able to meet the iron and steel production.
In the first half, with new and existing production capacity of the rapid release of iron and steel industry produced the economy remain high. By the steel market fluctuations in prices, in order to absorb existing inventory and to maintain the stability of steel prices is expected in the fourth quarter of all iron and steel enterprises will continue to a certain extent, limited production, steel production of the economy will also benefit from high level to gradually slow. Predicted results show that the fourth quarter and full year 2005, finished steel products reached 106.6784 million tons, respectively, and 376.9159 million tons, up by an increase of 29.64% and 27.69%.
Steel inventories in the second half of 2005, after gradually absorb into the economy after 2006, steel production is expected to rebound. Expected in 2006 China's annual output of finished steel products will reach 440.1342 million tons, up 16.77 percent year on year growth.
Steel imports continued to rebound in
Export growth no longer exists
Because of China's iron and steel industry to enhance manufacturing level, some of the imported products have been able to domestic production, coupled with slow economic growth by investment in fixed assets, especially the increase in real estate investment impact of the drop, the first half of the domestic steel imports have fallen sharply, with the same period last year, down 26.7%. However, after the third quarter, with the decline in global steel price index, as well as the RMB exchange rate increases brought about by the decline in real prices of steel imports, China's steel imports rebounded.
With the international steel market in 2006 to further exacerbate an oversupply situation, China's steel market is facing the impact of foreign low-priced steel imports increasing pressure, the domestic steel prices relative price of imported steel have become increasingly apparent. 2006 China's steel imports continued to rebound trend will appear in the year is expected to reach 32.6888 million tons, an increase of 15.32%.
The structure of imported products from the point of view, as some high value-added sheet production or domestic production of smaller hard year is expected to board the ratio of imports to total imports will be the basis for last year rose to 86.9%, while the pipe, wire, profiles, Railway Steel and other steel ratio fell to 4.10%, respectively, 4.21%, 2.64%, 0.50% and 1.65%.
Because China's domestic steel production in the substantial growth in the constant adjustment of product structure as well as international market prices higher than domestic prices, this year, China's steel and billet 1-8 months very rapid export growth in steel exports amounted to 15.0382 million tons, an increase of 115.46%, billet export volume of 5.84 million tons, an increase of 170% or so. However, the introduction of steel billet export tax rebate policy, as well as exports of steel to face the danger of anti-dumping, combined with continued weakness in the international market trend, the export of steel products will have a strong impact on trade is expected in 2006 China's steel exports amounted to 19.4605 million tons, down 5.83 %.
The structure of export products from the point of view, is expected to board in 2006 the proportion of total Chinese exports will rise to 43.73%, profiles and pipe exports account for a slight increase in the proportion of total exports, the proportion of other varieties of steel products decreased.
Based on the above pairs of steel production and import and export analysis shows that in 2006 China's domestic supply of steel products reached 453.3625 million tons can be, an increase of 48.03 percent, while total demand next year, but only in 336.8544 million tons, supply exceeds demand 11,650.81 million tons. A total of 3 1 [2] [3]
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