Since this year, the national steel supply and demand prosperous, inventory year-on-year decline, market prices rose sharply.Look forward to the national steel price trend within the year, will mainly depend on steel and steel production conditions.

There are many factors that affect the price of steel, such as cost, demand, supply, investment capital, market atmosphere, etc.Since this year, the national steel prices will rise sharply, mainly due to the cost increase, tight supply-demand relationship, speculative capital for the opportunity, and the resulting "bullish" market atmosphere.

It should be said that the impact of steel prices within the year of many factors, strong demand, high costs, monetary policy will not be "sharp turn" and other factors have been determined, and to a large extent by the early price rise is digested, so its market trend will be mainly determined by new factors of change.The new factor is nothing but the supply of steel during the year.In other words, depending on the future of China's new steel resources is to increase or reduce?And how much does it increase or decrease?

Generally speaking, China's steel and steel output of new resources by two parts: one is domestic output;Second, overseas imports.China's steel imports have been growing for some time.According to the General Administration of Customs, China's steel imports reached 20.23 million tons in 2020, up 64 percent.Due to the strong recovery of the global economy in 2021 and the significant increase of steel demand in other countries except China, the remaining share that can be exported to China is not much;In addition, steel prices in the international market are much higher than those in the domestic market, so the growth potential of China's steel imports this year is not big, and the growth rate of imports will fall rather than increase.In this case, the decision of the new national steel resources is the increase and decrease of the situation can only be domestic output, that is to say, to meet the national strong demand, balance the balance of domestic steel supply and demand the only hope, can only be the growth of domestic output.

There are three possibilities for steel and steel production in China this year.Because of the three possibilities of China's steel and steel production in the future, there will be three different trends of China's steel prices in the year:

It is domestic steel output declines, national steel prices rise further.According to the requirements of the competent departments, the national steel and steel output should be reduced this year.From the end of December to March 1, the Ministry of Industry and Information Technology said 4 times that it would reduce crude steel production, so the market is expected to compress crude steel production this year.

As the national steel demand continues to be strong this year, there is a large increase than last year;Also due to the difficulty of foreign imports have a lot of increase, if the domestic steel production can not increase accordingly, is bound to aggravate the tension between supply and demand, resulting in a new rise in steel prices.Henceforth domestic steel and steel output decreases more, its price rises also higher.

The second is a large increase in steel output, steel market seriously under pressure.At the moment, this scenario looks far more likely than the first.In the first quarter of this year, China produced 271 million tons of crude steel, up 15.6 percent year on year.Because there is demand, profit, capacity, so the year the national steel and steel output each month has been year-on-year growth, it is difficult to appear year-on-year decline.Conservatively, the annual crude steel production is expected to reach or close to 1.1 billion tons, an increase of more than 4 percent over the previous year.Bold, full-year crude steel production is expected to reach 1.12 billion tons, up more than 6%, or even more than the previous year.If there is this kind of domestic production growth situation, especially the annual crude steel output growth rate of more than 6%, is bound to produce a lot of pressure steel market.

In particular, it is worth noting that since this year, steel prices have been able to rise substantially, in addition to the cost increase, tight supply and demand relationship, but also in the market for steel production decline "expectations", and because of this "expectations" and the "premium".If steel and steel production does not fall in the future, its "premium bubble" will burst.At the same time, steel prices rose for a period of time after the change in risk appetite, its pregnant with a large callback requirements.The above two factors add up, then it is likely to cause the steel market "retaliatory fall".Market participants need to be particularly alert to this risk.

Third, between the two, the annual steel and steel output increased slightly.For example, the annual crude steel output growth within 1%.In this case, the steel market will maintain the current price, relatively stable.

Of the above three possibilities, the second is more likely.It can be predicted that steel prices in the year after the first lift, high running (average price higher than last year) at the same time, accompanied by wide shocks.