2016 Steel Market Trend Analysis and Countermeasures Enterprise

This year's market is said to be an accident, it is also reasonable, I have a number of issues of concern to everyone to make a discussion. Why the world economy is still in this state, China's economy is still in a difficult state want to recover? Overcapacity in the steel industries of overcapacity that are not resolved, and why a quarter of all businesses make money?
Why is this year's market there are so substantial rise in supply and demand point of view, there are four reasons?:
First, the low yield. First, in February average daily production is 200 million tons, the average daily production last year's level of 220 million tons, down 10%. This year is the apparent consumption can decrease by 2%, 3%, but production will fall significantly. This is actually an ultra-low yield.
Second, the low inventory. Beijing after the Spring Festival stock in the past 80 million metric tons, 100 tons now to 30 million tons, the inventory is too low. Explain what? Under our common psychological effect in reducing the risk to the stock. There is a business model changes brought stocks continued to decline.
Third, low prices. Last year, money ore do not produce steel make money, even in the fourth quarter Australian mining companies are losing money, and most Chinese mines are closed, most of the coal mines were shut, to such a degree.
Last year could have been prevented appear such a low price, low price Why? Because superimposed slump in global commodity, not just the steel down, everything is down. Now, the fundamental supply and demand factors are not enough to cause today's prices, is superimposed on what factors?
First, superimposed global commodities rally. Fed's first rate hike after the original year is expected to keep raising interest rates several times, due to the economic data continue to adjust to constantly shift after rate hike, most people still think the Fed will not raise interest rates, even in June hike probability below 50%. Not only is the steel commodities rebound rally, crude oil has rebounded more than 50%, including colored in a rebound.
Second, there is a reason that we have more money, a quarter of new loans over four trillion, plus other financing amount is more than seven trillion, plus other things sheet may be even larger numbers .
Third, there are futures, capital markets, but also the entire process of price increases played a role in fueling.
Why should the price fall in recent days? Direct factor is rising fast, up high, all the people do not accept this price. Furthermore, the recent state intervention in the black futures, the three major exchanges constantly adjust the "rules of the game", adjust the margin, trading hours adjustment, adjustment transaction costs.
Next will be like? Fed rate hike last year to look at the international level, one more year, the UK is not a retreat Europe, it does not reach a stable expectations we had, and this turmoil will not end.
But how do we do, how to see the steel industry?
First, the entire industry oversupply did not change, reform of the supply side has just kicked off,
Xinhua News Agency issued a paper in the coming months, will implement a more prudent monetary policy. Subtext is not so fast as in the first quarter of. Today, the state of excess production capacity, including in the past to stop production for a long time to resume production of the mines are. In this case, we put the peace of mind, to re-adjust.
Old mills can not let you earn five or six hundred dollars, not common sense. What is the real risk of trade enterprises is? To kill two-thirds of the traders is not excessive, not the economic downturn, was trading patterns changed. Last year, the electricity supplier turnover of more than one hundred million tons this year by the electricity supplier turnover figures will be large, the future is likely that most of the steel trade through a third party, the second party of direct trade transactions are not in the market.
Second, steel mills doing? Baosteel is almost one hundred percent direct docking, and most of Shougang, too, only some defective products, defective to get by way of trade. Hegang given target is direct, to what extent are they? They overseas direct order, to the acquisition of JCDecaux, directly to the acquisition of the largest trading companies, Haier cooperation with him, the engineer assigned to the Haier Group, when the use of What is the problem spot for you to solve, in the end the Haier plants are acquired, which is made of steel in behavior.
Third, the purchaser doing? SASAC below last year, SASAC jurisdiction requires all businesses to establish e-commerce sales and procurement platform, built, iron, including the national railway, built in the country, including China Construction Group can all We are under construction Jicai internet. In this situation, corruption, and now even office supplies have to bidding, the central enterprises are now required docking with the manufacturers.
Trade enterprises must seek to survive in the market, the need to do a long-term, sustainable development of enterprises in the whole of China in Transition Period allow enterprises to survive, to develop them. So we are firmly opposed: first, the difficulty in marketing, price speculation. Second, the so-called loss rather not lose market price, the market is not a business, the market is everyone. But also firmly opposed to the production of so-called non-stop protection argument, it is entirely the product of the past in short supply. What is now the idea is? According to market demand to organize production, continue to good customer service, not even think about fishing upstream from ten, twenty cheaper, because who is not easy, neatly done and stable cooperation and have a good cooperation with the customer on the line. If there is pressure to go to develop new markets, the Chinese market is so big, some markets, to find new markets, to develop new products and services.