Adverse factors for the steel market

In 2017, China has made some progress in responding to rising debt. Even so, the International Monetary Fund (IMF) in October 1977 warned that China`s debt continued to grow at a dangerous rate and recently said that Chinese banks need to raise capital to prevent inter-bank volatility. Debt problems.

According to an average estimate of economists surveyed by Bloomberg News, China`s fixed asset investment in infrastructure construction will grow by 12% in 2018, down from nearly 20 % in the first 10 months of 2017. This view holds that China`s construction sector will begin to decline next year as Chinese authorities are demonstrating their determination to reshape financial markets, with a focus on debt management. This blocked the investment, as well as making it difficult to mobilize capital for projects. The government will take measures to curb rising housing prices and efforts to cope with rising government debt risks. China`s economic growth may slow as the real estate market declines. Accordingly, construction steel consumption is weak and pressure on prices. However, it will not be so bad that it will become a crisis.

The policy of cutting production in the winter has little impact on supply. Meanwhile, steel production has started to rise again since March. Compared to the previous month`s output of cast iron and crude steel, before March, about 1.13 million tonnes of crude steel output was produced. Mainly generated by new arc furnaces or reactors. This shows that the profitability factor and the tight control are leading to the re-activation of illegal inducers. The remaining plants are also increasing production to make profits when prices rise sharply, continue to increase supply and inventory, pressure on prices.