Steel Enterprise Manufacturer Should Adjust Procurement Policy

The northern area has not already returned to work after the spring festival, steel product price has gradually risen. On February 15th 2017, the spot price of three-level steel rebar rise 220 CNY to 3450 CNY per ton after spring festival in Shanghai. With the steel price fluctuation, the imported ore price increased 50 NY to 690 CNY per ton in Qingdao port after spring festival. Steel enterprise look forward the changes in steel market.

The fixed assets investment continually increasing

According to data released by the national development and reform commission, 18 fixed assets investment project has been approved in January, involving 153.9 billion CNY of total investment. The cumulative growth rate of investment in construction was 10%, up 0.9% from previous month, rather than reduced as usual. The data showed that fixed assets investment was still increasing. In our field research, we found that railway construction started early after spring festival. The project progress also accelerated.

The steel demand top in March 2017

From supply and demand of steel market, the steel demand peak is still in March. In the field research, many steel enterprise have already got the orders for 2017, such as carbon steel plate，reinforced steel rebar and other orders They have enthusiasm to produce and stock steel product. By February 10th, the domestic social inventory of steel rebar was 8.08 million tons, up 46.28% before the spring festival. On the one hand, the steel enterprise transfer steel product inventory to traders. On the other hand, the steel traders express optimism for later steel demand, and willing keep the inventory. Steel product inventory do not rise significantly. By the end of January, steel product inventory was 14.15 million tons, 14.95% higher than before spring festival. Because the inventory was not too high, so the steel enterprise want to keep steel price rather than sell steel product at low prices.

Steel enterprise adjust own procurement policy while ore price changes

A part of steel enterprise resumed production. With the iron and steel ore inventory of steel enterprise reduced, the purchasing power of steel enterprise will increase. At present, iron and steel ore price have improved. Because the probability of large increase in iron and steel ore, steel enterprise should adjust their own procurement policy.