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Why Steel Price Rise So Fast Recently?
2021-05-13
In general, the price of steel is determined by many factors such as supply, demand, cost and external environment. From this year, multiple factors drive steel prices to rise faster. Such as high demand, high cost of raw material, international monetary easing, environmental protection limit production policy, capital market speculation and so on.
From the demand side, construction, automobile, machinery, home appliances and other downstream industries released fast demand. In the first quarter, mainly used in steel industry, real steel consumption increased by 47%. Of that, construction rose 49%. Rebar continues to become the largest variety of inventory reduction. At the same time, foreign steel demand also improved gradually. Mechanical and electrical product export growth is strong, drive steel export is obvious. Second quarter climate conditions are good, still in the steel consumption peak season.
But on the other hand, double control of output and production capacity, as an important measure to implement the goal of carbon peaking and carbon neutrality in China, increased market production reduction expectation.
April 28, steel import and export tariff adjustment policy landing, aimed at guiding the steel industry to reduce crude steel production. After May Day holidays, new version of the Measures for Implementing Capacity Replacement in the Steel Industry was released, Iron and steel capacity replacement ratio become to strict significantly. The affected products include seamless steel pipe, welded steel pipe, hollow sections, press fit fittings, stainless and carbon steel pipe fittings and so on.
Cost is another important factor to support steel prices. In order to stimulate economic recovery, the global implementation of monetary easing policies, driving commodity prices generally rise. At present, the price of iron ore, scrap steel, coke, coal and other raw materials used in steel production is still at a high level, and there is a trend of further rise.
"Hot" steel prices behind the more crazy stone. On May 7, China's iron ore price index showed that imported iron ore exceeded $200 / ton, another record high.
