In 2017, the steel market situation is great, steel rises and falls, prices are at a high level in recent years.2017 is also close to the end, how is the steel market in 2018? Overall, there is uncertainty in the Chinese steel market in 2018.
First, the success of domestic production capacity and banning "barred steel" can be consolidated?
In 2017, the production capacity measures are strictly implemented, under the high pressure of the State Council, the country set off a "sensational" "barred steel" capacity storm. The high price of steel, high profit temptation and financial constraints around the consolidation of production capacity and outlawing "barred steel" results to form a major challenge. The game of the two, enhanced the new year steel market supply and demand relations and market direction of uncertainty, this is the first uncertainty.
Second, President Trump's "tax reform" can be achieved?
December 2, a new round of U.S. tax reform bill passed in Congress, although the programme was passed, but there are still many details of the differences, Trump's "tax reform" will undoubtedly form a series of changes in the market expectations, such as the U.S. economic growth is expected to increase, the dollar index rebound, overseas funds back to the United States and so on. The impact of tax reform on China's economy is undoubtedly both good and bad. If the "tax reform" through, from the prospect of tax reform can be seen, the Trump administration will give priority to support the development of local enterprises and investment, which for the financial equity investment in the infrastructure sector to provide nearly 82% tax relief. With the late U.S. infrastructure investment to increase the code, is conducive to improve China's large-scale building construction, transport and other related industries exports. In addition to machinery and transport equipment, exports to the United States a large scale of China's manufactured goods, materials products, chemicals and other related industries will receive different degrees of benefits. But once aborted, it will have the opposite negative impact. In addition, can Trump honour his campaign promise to implement large-scale infrastructure construction in 2018? The key is where will the construction funds come from? This is the second uncertainty.
Third, is inflation on the rise?
There is overcapacity globally, leading to a lack of demand and dampening price rises in many areas. Although central banks have overissued a lot of money, they have not been able to curb the lack of demand. As the global economy continues to recover and approaches full employment, and the United States Government tightens its immigration policies, cheap labour is reduced, resulting in higher total wage costs. At the same time, the economic recovery will stimulate increased investment, ultimately triggering 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 of global end consumption. U.S. inflation rise, is bound to produce the global economy, capital and commodity pattern of spillover effects, and ultimately produce China's steel market more favourable. This is also an uncertainty.