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Wu Wenzhang: August Market Still Has Opportunity
Posted Date: 21/08/2018 
Expired Date: 21/08/2019
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Subject Wu Wenzhang: August Market Still Has Opportunity
Product Iron / steel
Product Description Steel industry still gets opportunity in August, said Mr.Wu Wenzhang, Board Chairman & President with SteelHome, on the 2018 Steel Market Seminar (Chengdu) on August 15.

Here is his major point:

He suggests audience to pay attention on the market development after October 1 when winter season production limitation starts. As for the recent iron ore price spike, he contributes it to the RMB depreciation which devalued by 7 percent since June 15. He doesn’t see any risk in construction steel price before mid September. If price drop happens, the market may have another round of chance. While, if the market keeps rising, risk may be the case thereafter.

About iron ore market:

1. China-produced iron ore supply sharply decelerates. China’s iron ore imports in the first seven months slid by 0.7 percent on year.

2. International iron ore miners see the slowing rise in production. Top four miners and Anglo American in H1 2018 totally generated 600 million tons of iron ore, a rise of 2.1 percent on year.

3. Structural iron ore supply conflict remains, and high-quality iron ore demand could not be satisfied. The washing process of low-grade ore supports lofty iron ore inventory, and the solid waste disposal policy of central government should be paid attention to. High inventory curbs the ore price spike. Stringent environmental protection and low price level rein in China-produced iron ore and emerging ore production.

About coal and coke

1. Daily coke production in July has fallen to the level of 2017 winter season. Coke climbs up. Coke supply was tight.

2. The strict pollution investigation against coke producers blocks the production. Policies are: the ‘de-coking’ policy in Jiangsu province, ‘to price coke based on steel’ policy in Beijing and Tianjin, ‘to price coke on steel’ policy in Shandong province, ‘to realize super-low emission’ policy in Tangshan and the strict emission restriction in Shanxi.

3. Coal demand is robust in summer, which supports thermal coal market. Coke tension in the market will not chance in long term.

Conclusion

1. Steel futures rise quickly, which adds the risk to the market.

2. The key focuses in Q4: China-US trade war progress, macro control policy in China, environmental protection hand, capital supply in domestic market, US index performance, RMB exchange rate movement, global commodities market.

3. Steel market is basically balanced in H1. The market price in H2 is imaginable on production limitations for environmental protection and infrastructure construction.

Subscribe SteelHome website to read the whole article and find more China Iron/Steel market information you’re interested in.
 
  Other products
Steel SteelHome Morning Express (27 September 2018) Weekly Report of China Iron Ore Market for August 3-10, 2018 Monthly Report on China Iron Ore Market for June 2018 Steel Attention: China Steel Market Survey Tour (IV) Invitation
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