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The price of raw material is rising

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The price of raw material is rising

Issue Time:2019-11-19
The price of steel pipe raw material is rising
After entering November, not only did the steel price not fall in the cliff-like decline in November last year, but it continued to rise slightly. As of now, the spot price of rebar has risen by 173 yuan/ton, breaking through the 3,900 yuan mark. Rebar futures prices also showed a large increase, with a cumulative increase of 189 yuan / ton.
Why the price is rising?
First of all, from the perspective of environmental protection, in the near future, due to the impact of heavy pollution, Zhengzhou, Zhoukou City, Xuchang City, Lianyungang (601008, shares) and other places issued orange warning or emergency response. A few days ago, the "Anshan City Heavy Pollution Weather Emergency Plan (Revised Draft)" was released, and the number of enterprises that restricted production and restriction was greatly increased, from 15 to 471. With the recent increase in weather pollution, the number of areas where production restrictions have been issued has increased. Therefore, the intensity and scope of environmental protection and production have increased, which has formed a certain positive effect on the market.

On the demand side, on November 13, Premier Li Keqiang presided over the State Council executive meeting, which proposed to reduce the minimum capital ratio of some infrastructure projects, and to supplement the shortcomings of roads, railways, urban construction, logistics, ecological protection, social and people's livelihood. Infrastructure projects, which is good news for the construction steel market. In addition, at the meeting held by the State Council for three consecutive days, Premier Li Keqiang said that it would accelerate the construction of short-board projects to promote effective investment and industrial upgrading. Strengthen the planning and preparation of major projects and promote the early start of construction. As demand is expected to improve, there will be some support for the later steel prices.

Steel social inventories have also seen a five-week decline, which is now lower than the same period last year. According to the monitoring data of the Lange Steel Cloud Business Platform, as of November 15, the social inventories of steel in 29 key cities nationwide were 7.417 million tons, down 463,000 tons from last week, a decrease of 5.88%; 2.757 million tons, a drop of 23.2%; the current steel social inventory has been slightly lower than the same period last year. As stocks fall again and again, confidence in the market will have a positive effect.
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