Second half of the steel price forecast market trends
    (A), the macroeconomic side
    The current international debt crisis is still affecting the European countries in the nerves, improves when the debt crisis in Europe is still unknown, dragged down by this, the intensity of the euro zone's economic recovery is still relatively weak, the U.S. real estate into the lowest since 2007, African unrest, the are the inflationary pressures caused by economic weakness of this fuse to blame. Countries, particularly in Europe and taken to ease the debt crisis, efforts to control inflation, will have some short-term commodity prices, but is already high inflationary pressures and national austerity policy has inevitably lead to economic weakness. This dire economic situation is also not possible even in the second half of the improvement, if you do not fuse the outbreak of the financial crisis, high and volatile commodity prices will continue in the short term the price up or Change but its practical form.
    Domestic economic performance in the first quarter in good condition, although there is in the development process some of the problems, but overall, steady and fast development. In the second quarter economic data showed China's May CPI rose 5.5% in July 2008 to record a new high, so the parties concerned, the central bank to respond quickly announced that from June 20 onwards raise deposit reserve ratio by 0.5 percentage points, the increase after large bank deposit reserve ratio as high as 21.5%, a new record high. At this point, the central bank this year to keep the deposit reserve ratio of the monthly rhythm of a tune, leading to short-term monetary policy will remain tight inside the state, the tension increased market funds, is expected to raise interest rates again next central bank may still exist, financial constraints inhibition effect on steel prices will be further demonstrated.
    (B), the output supply side
    From late February every ten days since the country's crude steel Nissan have maintained at 190 million metric tons, much higher than a year ago. Steel production remain high, or is the main factor in the second quarter of this year, construction steel spot prices higher, leading to higher steel profitable harvest. And is now has entered the peak summer, but throughout there has been no significant restrictions on electricity and other means of steel, steel production is still high release, but not the exclusion of this peak period, crude steel production has dropped. Construction steel in February, more concentrated domestic steel repair, subject to certain resources like coil suppression, but steel supply remained abundant; March steel output still maintain high capacity utilization as to maintain a high level; downstream of April construction steel demand to be released, and some small steel mills rebar, wire rod production as the main varieties, increasing yields; face power rationing in May, although the policy, but not the construction of steel production was inhibited, production is still continue to be released; while in mid-June as the market prices fall, the profits of steel has narrowed, but then a short production of steel rebar will not be reduced.
    (C), the downstream market demand side
    This year, China's automotive, machinery, household appliances of many downstream industries can not increase the level of orders, or even decline, 10 million units of affordable housing construction steel market is the only bright spot to look forward to, especially in the current steel market prices in a relatively low stage, protection Housing construction has become into the second half of the steel market resort. From the Department of Housing and statistics, the national completion rate of protection of housing construction during the first half only about 34%, from 10 million units throughout the year to complete the security room there is a great gap in the target, so the second half to protect the housing project will be accelerated, three quarter or the start focused on the situation there. Protection of housing construction will directly stimulate the demand for construction steel, which means to Xian Luo-based construction steel demand is expected to usher in a heavy volume in the second half the situation, construction steel prices likely to rebound first. But we are concerned about the protection of housing construction in the speed at the same time may consider the following two aspects: one room still need to pay close attention to the funds in place to protect the situation; the other hand, protection for the second half of the housing market caused by the expected demand for construction steel, steel does not rule out production continues to rise, thereby suppress the formation of prices.
    The above analysis, although the end of June, the market price performance has gone up, but considering the current international macroeconomic environment and the continued tightening of domestic financial side factors such as bad, so the next July, the overall downward trend in shock difficult to change, From the other side of macro-policy perspective, CPI target this important late into the third quarter is expected to gradually decline, tightening loose more likely, the demand side is also expected to pick up, which will pick up the steel city to provide macro- environment, is expected to drop this market will stop in August, after which ushered in a wave of rising prices, after adjustment to maintain the form of shock.
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