2018 steel plate processing industry is still in the boom cycle, wait and see?
From a cyclical point of view, after the previous five years of decline, the supply capacity of the steel processing industry has been declining, the market cycle led to steel prices soaring in 2016, supply-side reform will extend the boom cycle of the steel market.
Following the completion of 65 million tons and 290 million tons of production capacity of the steel and coal industry last year, the structural reform on the supply side will be comprehensively promoted and deepened this year. Especially the requirement of the state to ban strip steel completely by the end of June 2018 means that the "underground" steel output of 74 million tons of medium frequency furnace in China last year is expected to disappear, and the market supply and demand environment will continue to improve.
Since March, affected by tight supply and improved demand downstream, coal prices in power coal producing areas and ports have continued to rise, and coal prices have risen slightly. The latest issue of the Bohai Rim Power Coal Price Index (BSPI) closed at 606 yuan / ton, up 7 yuan / ton, has risen for the fourth consecutive period, up 19 yuan / ton.
"The rebound of coal prices and the improvement of market conditions should be the fundamental factors for the recovery of enterprise profits. The improvement of coal market conditions comes from the warming of macro-economy and the effect of coal supply-side reform. Xing Lei, director of the Research Center of Coal Listed Companies, China Coal Economic Research Institute, Central University of Finance and Economics, told the first financial reporter.

The same is true for the steel plate processing industry. Chen Da, executive director of Jiangsu Iron and Steel Services Association, said that the province's iron and steel industry in the first quarter of good results, high production and sales rate, full-load production.
Moreover, after five years of decline, most steel mills have lost the ability to increase investment and production, steel plate processing capacity in the natural reduction. At the same time, the government is also promoting the reduction of mergers and acquisitions and overcoming overcapacity. The economic data will be better and the demand for steel will remain stable. Therefore, he believes that the steel market may appear for several years.
Specifically, according to the variety trend, the contradiction between supply and demand of hot-rolled sheet coil is not too big, the trend is weak or seasonal factors, the release of future market demand has a chance to strengthen, steel construction applications will strengthen or enlarge the demand for sheet metal.
As for the rebar, due to insufficient supply of medium frequency furnaces, a strong rise has been triggered. The medium frequency furnace transformation needs 7-8 months of cycle, the first half of the screw thread resources are tight, prices are easy to rise but difficult to fall, a new high can be expected.
At present, iron ore stocks are on the high side, but the problem is that high-grade ore resources are on the tight side, and contracts will continue to strengthen in recent months.