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By 2015, China’s steel exports to new heights, reaching 112 million tons historic highs, but at the same time, exports also suffered cases of trade friction increases significantly. 2015 encounter trade friction cases to 37 since eight consecutive years ranked first in trade friction encountered in the industry. Enter 2016 is increasing, only from January to February alone from the EU, the United States, Canada and 18 other countries and regions from the “double reverse” investigation case. Faced with heavy siege of the international market, the future of our steel can go? It will make a brief analysis below.

First, the event focused on trade friction in China’s major steel input region

2015, China’s steel exports 112 million tons, a record high, which was undoubtedly the greatest contribution to the Asian region, exports to Asia when the amount of 79.64 million tons, an increase of 23.5%, accounting for 71% of total exports of steel products; followed by Latin the Americas, Europe and Africa, the three regions were exported 9.575 million tons, 9.556 million tons and 9.43 million tons, an increase of 0.2%, respectively, 26.4% and 36.2%; exports of 3.334 million tons in North America, down 27.2% Oceania export 851,000 tons, an increase of 7%.

Exhibit 1, 2015 China’s steel exports flow situation

Source: VAI data, MRI

Rapid growth in steel exports while exports suffered trade friction cases also will be a substantial increase in the number of 2015, involving up to 37 cases, and 27 cases in 2014, an increase of 37 per cent, while the figure in 2010 only 11 cases . Entered after 2016, in less than three months has reached 18 since the rapid growth of China’s exports of steel products face trade friction cases.

Chart since February 2014, China’s export trade friction cases involving steel case

Source: VAI data, MRI

Since trade friction cases in 2014 since, there are from Asia, 34 from Europe and 10 from Latin America, 17 from North America, 13 from Africa and 4 from Oceania there are four cases in these countries and regions in Asia accounted for the largest, it is also China’s largest steel exporting region, for China’s steel “double reverse” survey from the US, Canada and Mexico also contributed to the sharp decline in 2015 of steel in North America. Although the increase in the EU but most front flow Eastern European countries, and on the export of steel products a greater impact, “double reverse” survey focused on the beginning of 2016, steel exports to the EU also did not reflect the impact immediately.

Second, the Asian region as a traditional export, export volume still the mainstream.

As the exit area of the traditional steel, the importance of Asia in China’s export market, more and more prominent. 2015 China’s steel exports to Asia, 79.64 million tons, 24.7 million tons compared with 2006, an increase of 222%; the proportion of total steel exports in 2006 from 59 per cent to 71 per cent in 2015, an increase of 12 percentage points.

China’s exports to East Asia, mainly in South Korea, South Korea nearly 10 years has ranked China’s steel exports to the output of the first, but the proportion of total exports decreased year by year, our total exports in 2015 accounted for 17% compared with 37% of the peak in 2008 fell sharply. This is in contrast to the fast-growing Southeast Asian market, the total amount of China’s exports to Southeast Asia and 11 countries in 2015 amounted to 34.6 million tons, 5.2 times in 2006, accounting for 43% of the total of China’s steel exports, compared with 27% in 2006 an increase of 16 percent, which, Vietnam, Philippines, Indonesia, Thailand, Malaysia, Singapore ranks among the top 10 exporters.

China and Southeast Asia narrow strip of water, in the trade has a unique complementary strengths. With China – ASEAN Free Trade Area of the advance, it is a substantial increase in trade between the two. ASEAN is China and important regions “along the way” strategy, coupled with the economic development of the ASEAN region continues to improve, countries relatively inadequate infrastructure, a huge potential demand for steel. On the other hand, growth in steel production in the region has been relatively slow, difficult to meet the needs of Member States of the steel, and therefore, a large part of the ASEAN countries, steel consumption is met through imports, which also led to the country area exports increased significantly, while also causing the Southeast Asian countries initiated trade protection measures against China’s steel escalating situation.

Chart 3 China’s exports of steel flow accounting situation by country

Source: VAI data, MRI

On the other hand, China’s exports to South and West Asia market is growing rapidly. 2015 China South Asia export 9.665 million tons, an increase of 63%, of which exports to India, 4.76 million tons, up 25%; to Pakistan exports 2.555 million tons, an increase of 74.8%; Bangladesh export 1.784 million tons, an increase of 350%. From West Asia market, exports in 2015 to 14.037 million tons in Western Asia, up 32%, mainly in Turkey, Saudi Arabia, United Arab Emirates and other countries. Major countries in South and West Asia economic recovery rising demand for imported steel has a great role in promoting.

Chart 4 China’s steel exports flow to Asia subregion accounted circumstances

Source: VAI data, MRI

Asia is an important region of the layout “along the way” strategy, in the relevant countries along the net importer of steel accounted for more than 70% of China’s steel exports are an important target market. In addition to the direct export of steel, in our country “along the way” along the nation-building investment cooperation will also promote indirect steel exports. On “along the way” along the line, showing different areas of the heat is reflected in different ways. The hottest areas are in Southeast Asia, most of them look forward to cooperation with China in infrastructure; followed by Central and South Asia, most of them are keen to do business with China. 2015 is “along the way” building the first year, pulling effect on steel exports has not been fully released, with China to further deepen economic and trade cooperation with the countries of the Eurasian region, the opportunities in the Asian region “along the way” relevant countries will export more huge.

Third, China’s steel exports in Europe and the status of the market is declining.

Europe and North America was once an important export market, the European market in 2006 exports accounted for 18 percent of China’s total exports, exports to North America accounted for 15%, while in 2015, the European market share has fallen to 8%, North America is down to 3%, on the one hand, with Europe and North America by the economic downturn caused by sluggish demand for steel on the other hand, also steel trade friction with China and the US, between China and Europe related to escalating.

Chart 5 China’s steel exports flow changes

Source: VAI data, MRI

Since 2014, the United States, Canada, the European Union has launched the launch of a variety of steel products, “double reverse” investigation involving our products are basically in North America, Europe, the major export varieties. In the United States, because the United States has had on the vast majority of our steel products imposed high anti-dumping and countervailing duties, at present, China’s exports of steel products to the United States mainly for coated sheet and cold rolled coil, of 2014 American cold rolled steel exports 958,000 tons, accounting for 15.7% of China’s total export volume of cold rolled sheet. 2015 cold rolled coils to the US exports only 516,000 tons, down 46%. Therefore, if the United States and then impose restrictions on these two species, the way China’s steel exports to the US it will be fully blocked. Similarly, in February 2016 the EU on our plate, hot-rolled sheet, seamless initiated anti-dumping investigations, and cold-rolled sheet to make preliminary anti-dumping, the number of species involved to reach nearly 400 million tons, accounting for the country about 40% of Europe’s total exports, it is conceivable that once the product concerned have also been restrictions, we most likely will lose market opportunities in Europe.

Fourth, the African market has great potential in the short term is limited Latin American market

African markets are growing in importance in China’s steel export market. China’s steel exports to the rapid growth in recent years in Africa. 2015, Chinese exports to Africa steel 9.43 million tons, compared with 10 years ago, an increase of 6 times. African steel exports in 2015 accounted for 8% of China’s total exports, compared with 10 years ago, increased by 5 percentage points.

The last 10 years, as the political situation to become stable, rapid economic growth in Africa began, African steel demand increased year by year, in 2014 demand growth of 109% over 2004, and other major areas when comparing growth in steel demand in Africa the highest rate, showing a strong growth momentum. At the same time, nearly 10 years of steel production in Africa has barely increased. 2014 crude steel production in Africa 1588 tons, down 5% compared with 2004. Mainly in Africa in recent years almost no new steel capacity and political instability in some countries, steel production instability, domestic steel demand mainly rely on imports to meet the 2014 African imports of semi-finished and finished steel products in total 22.72 million tons, compared with 2005 an increase of 56%. Africa’s dependence on foreign steel products in 2014 reached 62%.

Chart 6 China’s steel exports to Africa changes

Source: VAI data, MRI

Chart 7 African steel production and consumption changes

Source: VAI data, MRI

Our exports to the Latin American market is also very fast growth in recent years, in 2015 the export volume of 9.575 million tons, compared with 10 years ago, an increase of 296%, accounting for China’s steel exports grew from 4% to 9%. 2015 export volume was essentially flat compared with 2014, only a slight increase of 0.4%, of which Chile fell swoop over Brazil as the largest importer of Chinese resources to be in Latin America in 2015, accounting for 14% of total imports of the region’s resources China for 1.339 million tons , down 6%; Brazil had previously been Latin America’s largest Chinese steel importer in 2015 by the country’s political situation and economic instability and the impact on trade of a variety of steel products started the investigation, resulting in a substantial decline in China’s exports to its steel 45%, only 1.187 million tons. Important export markets in Mexico and Peru is Latin America, Mexico is 1.129 million tons, up 16%; Peru was 98.2 million tons, down 4%. 2015, the four countries on China’s steel exports have started the business survey, but the amount affected by the present situation is not great, but our exports to other Latin American countries is also growing. Therefore, it can determine the future of China’s exports to Latin America that the main barriers to further economic development in Latin America. But in recent years by the global economic recession, stagnation of international trade, financial market instability, as well as commodities, especially energy products prices impact Latin American economies as a whole continued to decline, economic hardship is difficult to be fundamentally alleviate the short term, it will be on China steel exports have some negative impact.

Chart 8 China’s steel exports to Latin America changes

Source: VAI data, MRI

Chart 9 changes in steel consumption in Latin America

Source: VAI data, MRI

V. Conclusion

At present, China’s steel export market presents more flowering, emergence of both developed and developing countries, the Americas and East Asia, both good situation. But with the growth of China’s steel exports steel exports encounter resistance will also be growing, export directivity also has a clear tendency in all steel trade friction incident, the Chinese initiative responding to basic no, more of a direct avoidance choice. It also found significant features from Chinese steel exports flow to the ground. According to this line of thought to analyze, in 2016 China’s steel exports flow to Asia, especially in major Southeast Asia, Central America and Africa, and North America, Europe and Australia and other regions or exports continued to decline.

April 2016, the number of issuing import licenses for iron ore 116.6337 million tons, a decline of 1%, the amount of $ 6.565 billion, with an average price of $ 56.28 / ton; clearance number of 33.6508 million tons, the amount of $ 1.875 billion; average sea freight prices US $ 18.69 / ton, up $ 3.20 / ton. In April, the cumulative issuing 462,744,700 tons, the amount of $ 22.889 billion, with an average price of $ 49.46 / ton; total clearance 259.2608 million tons, the amount of $ 11.978 billion; average sea freight price of $ 14.14 / ton. China’s iron ore imports in April as follows:

First, the import of iron ore imports by country, price

April 2016, the number of import licenses from Australia issuing 70,438,700 tons, a decline of 3%. The amount of $ 3.916 billion, the average import price of $ 55.60 / ton; clearance number of 19.8689 million tons, the amount of $ 1.093 billion. January-April cumulative quantity issuing 287,112,300 tons, the amount of $ 13.799 billion, the average import price of $ 48.06 / ton; clearance number 164.7114 million tons, the amount of $ 7.474 billion.

Imports from Brazil the number of licenses issuing 24,326,900 tons, up 4%, the amount of $ 1.51 billion, the average import price of $ 62.11 / ton; clearance number 6.7246 million tons, the amount of $ 385 million. January-April cumulative quantity issuing 97,344,700 tons, the amount of $ 2.45 billion, the average import price of $ 55.77 / ton; clearance number of 50.8022 million tons, the amount of $ 2.45 billion.

South Africa, the number of issuing import licenses from 5.4013 million tons, up 6%, the amount of $ 297 million, the average import price of $ 54.93 / ton; clearance number 1.6086 million tons, the amount of $ 100 million. January-April cumulative quantity issuing 19,741,400 tons, the amount of $ 960 million, the average import price of $ 48.42 / ton; clearance number of 11.5934 million tons, the amount of $ 603 million.

Imports from other countries, the number of licenses issuing 16,466,800 tons, the amount of $ 840 million, the average import price of $ 51.05 / ton; clearance number 5.4487 million tons, the amount of $ 296 million. January-April cumulative quantity issuing 58,546,300 tons, the amount of $ 2.705 billion, the average import price of $ 46.21 / ton; clearance number of 32.1538 million tons, the amount of $ 1.452 billion.

Second, import News

January-April 2016, a total of 391 enterprises to apply automatic import license iron ore, of which 343 companies have actually imported.

Third, grade imported iron ore imports subcontractors

April 2016, the number of contracts from Australia imported 62,437,500 tons. Among them, 66% and above grade contract 128,100 tons, with an average price of $ 63.68 / ton. January-April total contracted 1.4987 million tons, with an average price of $ 52.30 / ton; 63-66% of the contract 7.5094 million tons, with an average price of $ 59.72 / ton. January-April cumulative contract 25.3489 million tons, with an average price of $ 57.60 / ton; 60-63% of the contract 26.0333 million tons, with an average price of $ 58.92 / ton. January-April cumulative contract 134.9255 million tons, with an average price of $ 52.00 / ton; 55-60% of the contract 28.2872 million tons, with an average price of $ 51.27 / ton. January-April cumulative contract 97.0543 million tons, with an average price of $ 44.95 / ton.

Imports from Brazil the number of contracts 18,546,300 tons. Among them, 66% and above grade contract 661,900 tons, with an average price of $ 76.97 / ton. January-April total contracted 5.1318 million tons, with an average price of $ 54.05 / ton; 63-66% of the contract 7.1613 million tons, with an average price of $ 60.85 / ton. January-April cumulative contract 23.9992 million tons, with an average price of $ 54.01 / ton; 60-63% of the contract 10.1487 million tons, with an average price of $ 57.65 / ton. January-April cumulative contract 41.6304 million tons, with an average price of $ 52.02 / ton; 55-60% of the contract 574,400 tons, with an average price of $ 47.03 / ton; January-April total contracted 1.7164 million tons, with an average price of $ 41.44 / ton .

Fourth, the case of imported iron ore sea freight

April 2016 imports of iron ore imports average sea freight $ 18.69 / ton. Among them, Australia $ 20.59 / ton; Brazil US $ 13.89 / ton; South Africa US $ 13.36 / ton; India US $ 13.71 / t; Indonesia US $ 4.97 / ton.

January-April, the average import sea freight $ 14.14 / ton. Among them, Australia $ 14.17 / ton; Brazil US $ 15.08 / t; Ukraine of $ 29.62 / ton; South Africa US $ 12.68 / t; Myanmar US $ 3.47 / ton; India US $ 13.25 / t; Indonesia US $ 5.67 / ton.

Fifth, the iron ore import market this month

April iron ore imports last month was essentially flat with the license issuing. April domestic steel prices pull up, blast furnace steel plant operating rates and capacity utilization increased significantly qoq. April outside the mine to the port MoM in March has also increased, but the arrival of high-grade ore with fewer resources, while most mills recover a good level of profitability, demand a certain degree of high-grade ore on the outside support of ore prices .

From the end of April, steel and iron ore spot market and futures market prices fell sharply. On the one hand, the rapid growth of the previous price, a substantial improvement in corporate profitability, making the resumption of production of enterprises to increase yield, April crude steel production hit a record high level, making the market supply increases; on the other hand, the market worried about the intensity of big macroeconomic policies adjustment, the market outlook is expected to cautiously optimistic and pessimistic side. After the price swings, the market sentiment is expected to return to fundamentals, potential supply increase, demand slowdown, can not change the pattern of short-term oversupply within. Recent market price oscillation stabilization of long-term risks are slowly gathering. Recommends that companies reasonable control of inventory.

April domestic market, steel prices continue to rise

Late show a trend of fluctuation

April, with steady growth, policy measures have been put to production, expected by the market continued to improve, demand for steel has increased the chain, the impact of steel stocks running low and other factors, the domestic steel market prices continue to rise, and rose significantly increased. With the sharp rise in steel prices, steel production capacity release rate, steel prices down trend. Volatility is expected to post market will run trend.

First, the domestic steel market prices continue to rise

In late April, China Iron and Steel Association CSPI steel price index was 84.66 points, the chain increased 15.79 points, an increase of 22.93 percent, 8.22 percentage point increase the previous month, the fifth consecutive monthly increase; rose 11.47 points, an increase of 15.67%.

1, steel long plate prices continue to rise, rose more than long steel plate

In late April, CSPI long products index was 86.02 points, the chain increased 17.74 points, an increase of 25.98 percent, 12.46 percent increase from the previous month; CSPI plate index was 86.52 points, the chain increased 15.26 points, an increase of 21.41 percent the previous month increased 5.35 percentage points, 4.57 percentage points lower than the long products prices increase; compared to last year, long products index rose 12.14 points, an increase of 16.43%; plate index rose 13.14 points, an increase of 17.91%.

2, the main varieties of steel prices have risen

In late April, eight varieties of steel China Iron and Steel Association monitored have increased substantially, the increase was significantly increased from the previous month. Wherein the high wire, rebar and angle ring prices rose 290 yuan / ton, 274 yuan / ton and 276 yuan / ton; rising plate, hot-rolled coil, cold-rolled sheet and galvanized sheet prices were respectively 429 yuan / ton, 369 yuan / ton, 407 yuan / ton and 426 yuan / ton; seamless steel prices rose 181 yuan / ton.

3, steel prices upward by week into May from up to down

From each week situation, April CSPI domestic steel price index showed upward trend by week. Since entering May, steel prices downward trend, which is relatively small decline in the first week, second week of decline has increased.

4, the regional steel market price changes

In April, the country of the regional market, steel prices continue to rise, and rose from the previous month were all increased. From the chain situation, North, Southwest, South, East, Northwest and Northeast China steel price index rose respectively 25.53%, 25.40%, 21.31%, 22.09%, 21.89 and 21.44 percent.

From the first two weeks of May the situation, six regional indices were down for two consecutive weeks, including North China, Northeast China, East China, Central South, Southwest and Northwest regions steel prices index decreased by 12.14% than the end of April, 8.28 %, 9.98%, 9.63%, 7.19% and 7.45%. From the drop, the price decline is most evident in North China.

Second, the domestic steel market price changes Factors

By the market is expected to increase, increasing end-user demand, low steel inventories and other factors, in April the domestic market, steel prices rose sharply.

1, macroeconomic policy measures have been put forward, the market is expected to continue to enhance

This year, in response to downward pressure on economic, national supply-side reform and demand side to promote the combination has issued a series to capacity, steady growth policies, including increased investment (irrigation, urban rail, underground pipe network, shantytowns, railways transportation, energy, environmental protection, etc.), stable foreign trade, financial support to the real economy, the full implementation of the camp changed to increase and ease the burden on local government debt to ease pressure. International Monetary Fund (IMF) this year April 12 release of the latest “World Economic Outlook”, the 2016 China’s economic growth forecast raised to 6.3% from the previous 6.5%, up 0.2 percentage points. Intensive introduction of macroeconomic policy measures for improving the market is expected to play an important role.

2, the economy has stabilized, an increase in steel demand

According to the National Bureau of Statistics, from January to April, the national investment in fixed assets (excluding rural households) increased by 10.5 percent, the growth rate of 1 – down 0.2 percentage points from March. From the chain perspective, in April fixed asset investment growth of 0.72%; the national real estate development investment grew 7.2%, of 1 – speed up 1.0 percentage points from March. Which new construction area increased by 21.4 percent, the growth rate of 1 – acceleration of 2.2 percentage points in March; in April, above-scale industrial added value increased by 6.0%, down 0.8 percentage points from March. From the chain perspective value added growth of 0.47% in April. From major steel industry, the special equipment manufacturing industry, automotive and railways, shipping, aerospace and other transportation equipment manufacturing industry increased 5.0%, respectively, 12.1% and 3.6%, respectively, last month to speed up 0.9,0.7 and 0.3 percent; general equipment manufacturing industry increased 3.8%, down 2.2 percentage points from the previous month. Overall, in April fixed asset investment, industrial added value growth rate despite the drop, but the chain growth, while the growth rate of real estate and major steel industry has accelerated, that the economy has stabilized, demand for steel has increased.

3, raw materials and fuel prices rose sharply, further support the formation of steel

According to worldsteel monitoring, in late April, the domestic iron ore price rose 512 yuan / ton, up 50 yuan / ton, an increase of 10.82%; iron ore imports (customs) average price of $ 52.57 / ton, up $ 7.29 / ton, an increase of 16.10%; coking coal price of 633 yuan / ton, up 10 yuan / ton, an increase of 1.61%; metallurgical coke price is 858 yuan / ton, rose 166 yuan / ton, an increase of 23.99%; scrap prices rose to 1602 yuan / ton, rose 381 yuan / ton, an increase of 31.20%. The main raw materials and fuel prices rose sharply, further formed on the steel support.

4, steel stocks continued to decline, stocks are low social

Since the first week of March rose to 12.68 million tons after the peak to the end of April, the nation’s major market society steel stocks declined for eight consecutive weeks, stocks fell to 9.08 million tons, 3.6 million tons more than the peak decline in early March, a decline of 28.39 %; down 4.57 million tons, a decline of 33.49%.

Third, the increase in international steel prices increase

In April, CRU international steel price index was 126.1 points, the chain increased 13.3 points, an increase of 11.8%, the fourth consecutive month, rising by 8.5 percentage points increase from the previous month; fell 7.6 points, a decline of 5.7%.

1, long products, plate prices continue to rise

April, CRU index for long products 131.7 points, the chain increased 13.2 points, an increase of 11.1%, the third consecutive monthly rise; CRU plate index was 123.3 points, the chain increased 13.3 points, an increase of 12.1%, the fourth consecutive month rise. Compared with the same period last year, long products index fell 17.8 points, a decline of 11.9%; sheet index fell 2.6 points, a decline of 2.1%.

2, North America, Europe and Asia continue to rise

(1) North America

In April, CRU North American steel price index was 137.0 points, the chain increased 11.8 points, an increase of 9.4%, an increase from the previous month increased by 7.9 percentage points. In April, the US manufacturing PMI was 50.8%, a decline of 1.0 percentage points. New orders index fell 2.5 percentage points, Imports & Exports rose 0.5 percentage points; as of late April, US crude steel capacity utilization was 71.3%, down 0.2 percentage points. This month the US Midwest mill rebar, merchant bar and sections prices turned up by the fall, wire and strip price increases to increase.

(2) the European market

In April, CRU steel price index for Europe 131.2 points, the chain increased 7.1 points, an increase of 5.7%, an increase from the previous month increased 2.8 percentage points. April, the euro zone manufacturing PMI was 51.7%, the chain increased 0.1 percentage points. In the euro area the major countries, the German manufacturing PMI was 51.8%, the chain increased 1.1 percentage points; Italy 53.9%, the chain increased 0.4 percentage points; Spain was 53.5%, the chain increased 0.1 percentage points; France was 48.0%, a decline of 0.3 percentage points. This month the German market for long products and plate prices have turned up by the fall; class steel sheet price increases last month has increased.

(3) Asia

In April, CRU steel price index was 116.8 in Asia, the chain increased 17.6 points, an increase of 17.7%, an increase from the previous month increased 12.7 percent. In April, Japan’s manufacturing PMI was 48.2%, a decline of 0.9 percentage points; Korean manufacturing PMI was 49.5%, unchanged. Chinese manufacturing PMI was 50.1%, a decline of 0.1 percentage points. Far East this month, the main varieties of steel market prices continue to rise, and the increase has increased.

Fourth, the late steel market price trend analysis

Since the release of steel production capacity quickly, so pre eased the supply and demand again prominent on steel prices rising trend constrain. It is expected to post sharp rise in steel prices difficult to continue, will become the fluctuation running posture.

1, the effects of macroeconomic policy measures will gradually appear, steel demand is relatively stable

2016 China’s economic growth target is 6.5-7.0%. In response to downward pressure on the economy around “to the production, to inventory, deleveraging, reduce costs and fill short board” and the five tasks, the state has issued a series of policies and measures to steady growth. From January to April the macroeconomic situation, China’s economy maintained a rebound trend, investment in real estate and machinery, automobile, shipbuilding and other industries have appeared stabilized trend. Judging from the recent situation, the steel industry to resolve the overcapacity embodiment has been finalized, clearly the regional overall arrangement of “Thirteen Five” period, draw up a production yearly energy Yajian or exit plan, resolve excess capacity will be in full into the official the implementation phase; “major transport infrastructure construction projects three-year action plan,” the national Development and Reform Commission, Ministry of Communications jointly issued pointed out, 2016–2018 will focus on promoting the railways, highways, waterways, airports, urban rail transit project 303, involving total project investment of about 4.7 trillion yuan. With the apparent effect of macroeconomic policy measures, the late steel demand is relatively stable.

2, steel production capacity release rate, rise in steel prices will dampen

With the sharp rise in steel prices in March and April iron and steel enterprises to resume production, the expansion intensified. According to the National Bureau of Statistics data, April crude steel production was 69.42 million tons, an increase of 0.5%; average daily crude steel production of 2.314 million tons, the highest level. According to customs data Letters, April the country’s steel exports 9.08 million tons, 1.1 million tons of steel imports, net exports of crude steel equivalent to 8.28 million tons, a decrease of 760,000 tons; in April the domestic supply of 61.14 million tons of crude steel, according to the calendar number of days, up 2.5 percent from March, compared with January – growth of 17.2% in February. Steel production rose rapidly, will enable the domestic market supply and demand increased, the late steel prices dampen demand.

3, iron ore and other raw materials and fuel prices fall, weakening the supporting role of steel

With the sharp rise in the early steel, raw materials and fuel prices showed a rising trend. But since entering May in decline trend. According to worldsteel monitoring, until the second week of May, the domestic iron ore price is 512 yuan / ton, compared with last week’s decline of 8 yuan / ton, a decline of 1.56%; scrap prices is the decline for two consecutive weeks, dropped to 1416 yuan / ton, compared with the end of April fell 186 yuan / ton, a decline of 11.61%; to May 13, CIOPI imported iron ore (iron ore fines) average price of $ 53.50 / ton, down $ 10.51 / ton than the end of April, a decline 16.42%. Coking coal prices remain stable. The main raw materials and fuel prices, steel prices weakened supporting role.

4, corporate financial tensions will continue, the price is still the main means of market competition

Since the banking system strictly control the scale of credit excess industry, iron and steel enterprise financing, financing your capital remains tense conflicts have eased significantly. According to central bank data, the end of April, outstanding RMB loans grew 14.4%, growth rate 0.3 percentage points lower from the previous month; the month of RMB loans increased by 555.6 billion yuan, a deceleration of 152.3 billion yuan, 1.37 trillion last month, much lower level. As steel enterprise products high degree of homogeneity in the market situation of supply exceeding demand, price competition is still the most powerful means of market competition.

Post-market need to focus on the main issues:

First, the resumption of production companies more, to accelerate production release. March-April steel companies focused resume production, expansion, so that national crude steel output in April reached a record 2.314 million tons. Steel production is expected to post will remain high. In the oversupply situation has not changed the situation, substantial growth in steel production increased production supply and demand. Iron and steel enterprises should carefully analyze the changes in the market, do not blindly expand production, continue to do the yield control, stable job market.

Second, the international trade environment of tension, exports will increase the difficulty. With the growth of steel exports, foreign trade disputes between China and gradually increased in the first quarter was the cumulative incidence of 16 cases. Recently, the United States on the part of domestic steel companies filed 337 investigation, the EU has refused to recognize China’s market economy status. Europe, America and Southeast Asian countries is expected to post trade protection measures will further increase the difficulty has increased steel exports, export growth will drop slightly.

Third, the iron ore market is still in oversupply situation, iron ore prices rose sharply difficult. January-April the country imported a total of 325.44 million tons of iron ore, an increase of 6.1%; in April the country imported iron ore (customs) CIF average of $ 52.57 / ton, up 16.1 percent, the second consecutive monthly rise ; 4 at the end of imported iron ore port stocks was 100.08 million tons, the chain increased 3.9%. Iron ore market is still in oversupply situation, iron ore prices rose sharply difficult.

In 2016, steel prices rose more than 30% . only in 3 months.

Inventories are falling fast, low-cost resources digested, subsequent ordering cost has increased significantly, for the time being to consider keeping low inventory status;

Chinese steel market sentiment index: high consolidation this week, Steel price rise 12%
April 8, 2016

Chinese steel market sentiment index continued high consolidation, although the plate varieties declined slightly, but all varieties sentiment index is still hovering between 60-80. This week on the market, cash resources tight specifications, traders reluctant to sell sentiment and no significant pressure concentrated, market prices thus continued elevation, especially in North China rebar prices close to 2600 yuan / ton, Chongqing, Chengdu, Southwest China Zhou also rose 200 yuan. Currently, the market without a lot of strain on the resources and the late arrival of more active business mentality, expected next week, the domestic steel market or continue to be strong. Specific varieties index, 8th rebar sentiment index was 83.34, up 0.92 compared with 1 April; hot rolled coil sentiment index was 68.35, up 7.39 compared with April 1; cold rolled coils sentiment index was 59.15, increase over April 1 4.83; plate sentiment index was 76.79, compared with April 1 fell 8.56; structural steel sentiment index for 84.09, compared with April 1 rise 2.59. Details are as follows chart: Item April 1 April 8 trend rebar, hot rolled coil rose 82.42, 83.34, 60.96, 68.35, 54.32, 59.15, increase in cold rolled steel plate rose 85.34, 76.79, 81.50, 84.09,  rise structural steel drop
Explanation: The index greater than 50 representatives of the expansion or increase or rise or rise less than 50 contrary, equal to 50 representatives unchanged

March 30 evening, a number of shares of Anshan Iron and Steel, Valin Iron & Steel, Maanshan Iron & Steel and other steel-intensive enterprises publish annual reports, most dismal performance.

Steel prices continued to fall causing huge loss of the main industry, coupled with the rapid devaluation of the yuan, a substantial increase in foreign exchange losses in the past year, the domestic steel industry as a whole suffered a loss. Steel prices have so described 2015 industry conditions: the most serious challenge, competition is fierce, the survival of the most difficult “ice age.”

The report shows that in 2015, Angang Steel Company, Valin Iron & Steel, Sha Steel shares, three steel Min light, Maanshan five steel prices by surplus to deficit. Among them, the most Magang loss, the loss amounted to up to 4.804 billion yuan, 221 million yuan profit company last year. Angang Steel Company, Valin Iron & Steel, Sha Steel shares, three steel Min light, respectively, loss of 4.593 billion yuan, 2.959 billion yuan, 80.6218 million yuan and 929 million yuan. In 2014, the aforementioned corporate profits were 928 million yuan, 74,634,300 yuan, 35,216,400 yuan and 31.9527 million yuan.

Steel prices continued to decline in steel prices is the direct cause of the decline of production and operational effectiveness. According to Chinese Industry Association data show that China Steel Association CSPI steel price index hit a low of 20 years, representing a decrease of 27.26%. By 2015, long steel prices fell more than 800 yuan / ton, plate and strip and pipe prices more than 1000 yuan / ton. Although commodity prices of raw materials also fell, but still can not make up steel prices decline. Industry profit margins continue to decline, gross profit margin was 2.38% Valin Iron & Steel, Sha Steel shares gross margin was 4.5%.

According to CISA latest statistics, in late February 2016, average daily production of crude steel member steel companies 1.5919 million tons, ten days growth of 2.34%.
At the end of late February, members of the iron and steel enterprises steel stocks 13,794,700 tons, representing a year-end decline 5.67%, compared with year earlier, down 19.46%.

Friday evening of snails, strong iron ore are closed limit, SCREW 2072 1605 contract closed up 4.91 percent, iron ore 1605 contract closed 407, up 4.9%, which greatly boosted the market two days weaker confidence, spot market prices continue to see hope.
Sure enough in the futures market rebar, iron ore daily limit Friday stimulation, steel chose wayward soaring again Saturday morning Tangshan billet prices 14~25 USD/ ton, billet offer has risen to 300USD/ ton. Billet rose by stimulation of steel mills, traders will have to follow up, or count less 4.6 to 11.2 USD is normal, more than 15 usd are also many gains, the second price adjustment is quite common, some steel mills, traders price then reported casually entertained then do not sell, and so the opening Monday, as the case may be.