
Breaking down the uncertainties of the steel market in 2018
- Categories:Company Dynamics
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- Time of issue:2021-04-25 18:39
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(Summary description)The situation of the steel market in 2017 was very good. The price of steel rose more and fell less, and the price was at a high level in recent years.
Breaking down the uncertainties of the steel market in 2018
(Summary description)The situation of the steel market in 2017 was very good. The price of steel rose more and fell less, and the price was at a high level in recent years.
- Categories:Company Dynamics
- Author:
- Origin:
- Time of issue:2021-04-25 18:39
- Views:
The situation of the steel market in 2017 was very good. The price of steel rose more and fell less, and the price was at a high level in recent years. 2017 is also coming to an end. What is the steel market in 2018? Overall, there is uncertainty in the Chinese steel market in 2018.
First, can the success of domestic production capacity reduction and the ban on "floor steel" be consolidated?
In 2017, the measures to reduce overcapacity were strictly implemented. Under the high pressure of the State Council, a "vigorous" storm of reducing overcapacity was set off across the country. The high price of steel, the temptation of high profits, and financial constraints in various places have created a major challenge to consolidate the results of reducing production capacity and banning "local steel". The game between the two has increased the uncertainty of the supply-demand relationship and market trend of the steel market in the new year. This is the first uncertainty.
Second, can U.S. President Trump's "tax reform" be realized?
On December 2nd, a new round of the US tax reform bill was passed in Congress. Although the plan was passed, there are still many details and differences. Trump's "tax reform" will undoubtedly form a series of expected changes in the market, such as Expectations for economic growth in the United States may increase, the dollar index rebounds, and overseas funds return to the United States. The impact of tax reform on China's economy is undoubtedly a combination of pros and cons. If the "tax reform" is passed, it can be seen from the prospects of the tax reform that the Trump administration will give priority to supporting the development and investment of local enterprises, including a nearly 82% tax deduction for financial equity investment in the infrastructure sector. With the increase in US infrastructure investment in the later period, it is conducive to increasing the export of my country's large-scale construction, transportation and other related industries. In addition to machinery and transportation equipment, my country's manufactured products, material products, chemicals and other related industries that are exported to the United States on a larger scale will receive varying degrees of benefits. But once it dies, it will have the opposite negative impact. In addition, can Trump fulfill his campaign promise to implement large-scale infrastructure construction in 2018? The key is where the construction funds come from? This is the second uncertainty.
The third is whether inflation is on the rise?
The global overcapacity has led to insufficient demand in many fields and restrained price increases. Although the central banks of various countries have over-issued a lot of currencies, they cannot suppress the lack of demand. As the global economy continues to recover and is approaching full employment, the US government has tightened its immigration policy and reduced cheap labor, resulting in an increase in total wage costs. At the same time, economic recovery will stimulate an increase in investment, which will eventually lead to an increase in demand and gradually achieve a balance between supply and demand. In this environment, the United States is still the most powerful engine for global terminal consumption. Rising inflation in the United States will inevitably have spillover effects on the global economy, capital and commodity structure, and ultimately produce a bullish Chinese steel market. This is also an uncertainty.
