Chinese New Year holiday and its impact on global steel markets - آرتان پرس | مرجع رسمی اطلاع رسانی فولاد | آرتان پرس | مرجع رسمی اطلاع رسانی فولاد

شنبه, ۹ اسفند , ۱۳۹۹ 16 رجب 1442 Saturday, 27 February , 2021 ساعت ×
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Chinese New Year holiday and its impact on global steel markets

شناسه : 40780 ۳۰ بهمن ۱۳۹۹ - ۱۳:۴۱
In recent days, the global steel market has been in recession due to the Chinese New Year holidays, and we are witnessing a decrease in prices in Metal Bulletin reports. However, analysts believe that with the expansionist policies of the Chinese government, we will see the growth of the country's construction and steel sector.
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The New Year holidays in China, as the largest world festival, are held every year in China and several other Asian countries, and practically due to the solar and lunar symmetry of Chinese history, it is not possible to consider an exact date, but we can say with certainty This celebration will be held in February. This great world festival has a great impact on the financial markets, especially the industrial and mineral markets of the world. In the following, we will discuss the impact of this factor in the global steel markets. Please be with Artan Press.

 

*** Evaluate existing warehouses before Chinese New Year

One issue that needs to be acknowledged is the issue of Chinese steelmakers’ inventories, which are always evaluated by Chinese marketers before the Chinese New Year. Chinese traders prefer to keep their inventory in balance so as not to be surprised by possible price increases. Therefore, the growing demand of Chinese steelmakers to repair their stockpiles before the holidays, caused sellers to keep their prices in the import market almost constant. With the start of the Chinese New Year holiday, most traders have left the market and steelmakers’ inventories are growing.

 

*** Cross-sectional recession in the global steel market

An increase in stockpiles and a decrease in demand during the Chinese New Year celebrations can cause a temporary recession in the global steel market and cause other steel markets to fall in price. We will see a drop in downstream steel chain prices. Therefore, field studies show that the prices of long steel products such as rebars and wires are falling due to the Chinese New Year holidays during the period from February 8 to February 19.

 

*** Consumer behavior is a major factor in global steel prices

Another issue is consumer behavior in determining global steel prices in the face of the Chinese New Year holidays. Construction is expected to resume in late February, or more precisely around February 26, when construction workers return to their work site and resume work. So in the current situation, many consumers have no reason to demand because warehousing costs are not affordable due to the national holidays in China.

 

*** The impact of Chinese New Year’s Jason on the rolling price

As it was said about long sections, and for the same reason, the rolling stock market is accompanied by a recession and a drop in prices. The price of the 4.75 mm HRC hot rolling mill is estimated at $ 4507 yuan per tonne, or $ 697, down 11 yuan ($ 1.7) in the week ending February 13, while the price of the 20 mm rebar is estimated at $ 4375 ($ 677). Which had a low growth of one yuan. Chinese steel prices are expected to fall by mid-February due to holiday celebrations and declining construction activity.

 

*** Evaluate iron ore prices during the Chinese New Year holidays

China’s iron ore market is in a state of severe recession and this issue is not far off from any analyst. China is the largest consumer of iron ore in the world and its demand has reached zero during the holidays. Therefore, a large volume of global products in the stone sector. Iron is trapped in warehouses and has no customers for a short time. The price of imported iron ore in China fell due to declining buying demand before the Chinese New Year holiday, and this was almost certain in the market.

 

*** Stability of falls in world iron ore prices

Prices have been reported at all points of sale in the world of iron ore with a drop in prices. The latest data on the price of 62% pure iron ore recorded $ 156.05 per ton of dry CFR, which dropped by $ 2 per ton. The lowest drop in the days leading up to last week.

 

*** The end of the holidays, the beginning of the growth of iron ore prices

But in the case of iron ore, one issue should not be overlooked, and that is the end of the Chinese New Year holidays and the growth of Sharpe demand in the markets. So in the current situation, investors in the field of iron ore are trying to increase their iron ore stock Maximize so that they can make the most of the demand created after the holidays. Overall, the global steel market observation reflects the fact that the market will be on a good track after a week-long pause.

 

*** Bright days await the global steel market

The global steel market is likely to boom after the Chinese New Year holiday, as expansionary policies in China are likely to boost traders’ purchasing power to curb the effects of the coronavirus. The Chinese government is expected to close. Introduce new economic stimulus to strengthen the construction and housing sectors. If this statement comes true, we will see a sharp increase in demand for Chinese steel and iron and, consequently, the growth of the entire steel supply chain, which can also overshadow Iran’s export markets.

 

*** Environmental strictures and Chinese steel

Environmental approaches in the new year will be pursued with the utmost rigor, and China has made commitments to reduce crane dioxide emissions in the international community. Therefore, iron ore consumption is likely to be affected by this news, and instead of iron ore from scrap Iron will be used in Chinese factories. This issue can lead to a boom in the Turkish and Iranian scrap markets and we can see the growth of domestic iron scrap prices and the scarcity of this product in the Iranian market. Therefore, it is expected to see an increase and decrease in the iron ore market during We are in the coming months.

 

*** Steel price fluctuations on the eve of Chinese New Year celebration

But the question arises why in In the days leading up to Chinese New Year celebrations, we saw price fluctuations in the international steel market. The reason was that some Chinese, Hong Kong and Singaporean traders postponed buying iron ore to the final days before the Chinese New Year holiday After making a purchase from the ports inventory, the market was accompanied by cross-sectional demand, which caused fluctuations in Metal Bulletin reports.

But there is no doubt that the iron ore market around the world has experienced the most price fluctuations and impact due to the Chinese New Year holidays. In the Iranian export market, the last recorded price of 61% pure magnetite iron ore was $ 120.5 per ton FOB and 61% pure Iranian export hematite iron ore was $ 118.4 per ton FOB.

 

*** Lack of cross-sectional customer in the global steel market

Steel markets are unlikely to see hot and exciting reports for the next three weeks, as the elimination of the Chinese factor cannot easily be ignored. It is expected that during the Chinese New Year holidays, all foreign trips will be canceled and a population of over one billion Chinese will travel domestically. This year, this holiday will be officially extended from February 11 to 17 (February 13 to 15) and unofficially until 15 days later, ie until February 26 (March 29), in order to facilitate domestic traffic.

 

*** Concerns about Quaid are gone

No worries about pandemics in China The virus pandemic situation is well controlled. At the same time, the Ministry of Industry and Information Technology is strongly determined to reduce annual steel production. Despite the decrease in trading volume, the market atmosphere is positive and strong. The high cost of filling warehouses before the Spring Festival supports a further increase in steel prices after the holidays. However, analysts do not see the possibility of improving the steelmakers’ margins in the future. The situation of market indices outside China also promises bright days for steel.

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