“The price of steel fell to the level of 1994 and winter has already arrived, indicating that the spring will not be too far away.†On December 26, Qi Xiangdong, deputy secretary-general of the China Iron and Steel Association, stated at the annual meeting for purchasing steel products in the central region.
According to data from the China Iron and Steel Association, from January to November 2008, 46.96 million tons of steel were produced, which was a year-on-year increase of 2.6%, and the growth rate was down 14.1 percentage points year-on-year. In November, 35.9 million tons of steel were produced, a decrease of 4.97 million tons from the same period last year, a decrease of 12.4%.
After September 2008, there has been a rapid decline that has not been seen in recent years. In June, the nation’s highest level of daily production of 1,564,800 tons of steel was equivalent to an annual output of 573 million tons; in September it was reduced to 1,230,500 tons of daily steel, equivalent to an annual output of 482 million tons of steel; in October, Nissan Steel 115.81 million tons, equivalent to an annual output of 423 million tons of steel; in early November, 1.07 million tons of steel produced, equivalent to an annual output of 393 million tons of steel.
"Compared with the lowest monthly output, the highest monthly production is reduced by 14.8 million tons per month, which is equivalent to an annual reduction of 170 million tons. This reduction in output is unprecedented in the history of global steel production," said Qi Xiangdong.
Qi Xiangdong believes that the decline in market demand caused by the collapse of steel prices is an important direct cause, and the deep-seated reason is “three lossesâ€: the loss of market confidence, the loss of circulation links and the “accumulator†function of end-users, and production. The "base price" for which the company sets the sales price is lost.
According to the China Iron and Steel Industry Association price monitoring: By December 19, the domestic market comprehensive price index dropped to 103.29 points, the long product price index was 108.7 points, and the plate price index was 101.56 points, both basically at the price level in April 1994 (price The index was in April 1994 as 100).
“This shows that the steel price is lower than the production cost.†Qi Xiangdong said, “At present, the price relationship between steel prices and prices of other products in the industry chain is seriously distorted, and neither meets the laws of value nor the laws of market economy.â€
"For trading companies, it is time to buy as much as they have." Qi Xiangdong said.
According to data from the China Iron and Steel Association, from January to November 2008, 46.96 million tons of steel were produced, which was a year-on-year increase of 2.6%, and the growth rate was down 14.1 percentage points year-on-year. In November, 35.9 million tons of steel were produced, a decrease of 4.97 million tons from the same period last year, a decrease of 12.4%.
After September 2008, there has been a rapid decline that has not been seen in recent years. In June, the nation’s highest level of daily production of 1,564,800 tons of steel was equivalent to an annual output of 573 million tons; in September it was reduced to 1,230,500 tons of daily steel, equivalent to an annual output of 482 million tons of steel; in October, Nissan Steel 115.81 million tons, equivalent to an annual output of 423 million tons of steel; in early November, 1.07 million tons of steel produced, equivalent to an annual output of 393 million tons of steel.
"Compared with the lowest monthly output, the highest monthly production is reduced by 14.8 million tons per month, which is equivalent to an annual reduction of 170 million tons. This reduction in output is unprecedented in the history of global steel production," said Qi Xiangdong.
Qi Xiangdong believes that the decline in market demand caused by the collapse of steel prices is an important direct cause, and the deep-seated reason is “three lossesâ€: the loss of market confidence, the loss of circulation links and the “accumulator†function of end-users, and production. The "base price" for which the company sets the sales price is lost.
According to the China Iron and Steel Industry Association price monitoring: By December 19, the domestic market comprehensive price index dropped to 103.29 points, the long product price index was 108.7 points, and the plate price index was 101.56 points, both basically at the price level in April 1994 (price The index was in April 1994 as 100).
“This shows that the steel price is lower than the production cost.†Qi Xiangdong said, “At present, the price relationship between steel prices and prices of other products in the industry chain is seriously distorted, and neither meets the laws of value nor the laws of market economy.â€
"For trading companies, it is time to buy as much as they have." Qi Xiangdong said.
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