Our reporter Xu Yiming
July is approaching. At present, all localities are working hard on infrastructure projects, striving to complete the important tasks of the 14th Five-Year Plan.
As an indispensable steel in infrastructure, the price has risen sharply this year and hit a record high, which has attracted widespread market attention.
Under the guidance of relevant policies, what is the future price trend of iron ore and steel?
What is the impact on related listed companies?
To this end, the "Securities Daily" reporter interviewed five chiefs (including chief economists and chief analysts) yesterday to analyze the development of the steel industry.
Iron ore prices rise and fall
In response to the issue of rising prices of bulk commodities and raw materials, since mid-May, the State Council executive meeting has "named" bulk commodities four times.
Li Zhan, chief economist of China Merchants Fund, said in an interview with a reporter from the Securities Daily that rising commodity prices will increase the cost pressure on the midstream of the manufacturing industry, which will increase the production and operation costs of manufacturing companies and further spread to the downstream consumer sector. It may cause inflation, which is not conducive to the steady growth of the macro economy.
The country's measures to increase commodity prices will help ease the cost pressure on the midstream manufacturing industry and promote the sound development of the macro economy.
Statistics show that on March 31 this year, after the main iron ore futures contract hit an intraday low of 919.5 yuan/ton, it rose all the way up and hit a record high of 1,358 yuan/ton in the intraday session on May 12. The cumulative increase during the period reached 48.33%.
As of the close on June 28, the main iron ore futures contract reached 1196 yuan/ton, a decrease of 13.55% from the highest price of 1358 yuan/ton on May 12.
In terms of spot, iron ore hit a new low of US$156.35/ton on March 22 and climbed all the way to US$233.1/ton on May 12.
As of the press release on June 28, the spot price of iron ore was US$218.7/ton.
What are the reasons for the previous increase in iron ore prices?
Chen Mengjie, chief strategy analyst at Yuekai Securities, said in an interview with the "Securities Daily" reporter that, first, under the stimulus of large-scale monetary easing policies in overseas markets, economic recovery expectations and inflation expectations have been greatly boosted; second, in the context of the epidemic, The shrinking supply of commodity producing areas, combined with the domestic production restriction under the "carbon neutral" target, has led to a gap in the mismatch of supply and demand.
Regarding the trend of iron ore prices rising and falling, Yang Delong, chief economist of Qianhai Kaiyuan Fund, said in an interview with a reporter from Securities Daily that: on the one hand, it is related to a series of measures taken by relevant national ministries and commissions on the rise of commodity prices; On the one hand, it stems from the global central bank's monetary easing policy, especially the Fed's "release of water", which led to a sharp rise in commodity prices.
After the National Standing Committee mentioned commodities four times, the prices of coke, coking coal, thermal coal, iron ore, rebar, and hot-rolled coils have all dropped to varying degrees.
Xu Weihong, chief economist of Yongxing Securities, told the "Securities Daily" reporter that the fluctuations in domestic steel prices and global commodity prices are basically in step.
This round of global commodity prices, including the rise in domestic steel prices, has compressed the export profits of the domestic manufacturing industry.
As expectations for the tightening of US monetary policy have increased, since June, this round of irrational increases in commodity prices has seen a significant correction, which is beneficial to the steady development of China's economy.
For the Fed, the transmission effect of this round of commodity price increases to the consumer price index (CPI) is very obvious.
Limited room for steel prices to rise in the future
Zhu Hong, a senior statistician at the Department of Industry of the National Bureau of Statistics, analyzed that due to factors such as rising commodity prices, the newly increased profits of industrial enterprises were mainly concentrated in the upstream mining and raw material manufacturing industries, and the cost pressures in downstream industries continued to increase.
In the next stage, efforts will be made to guide the return of bulk commodity prices to the fundamentals of supply and demand, and to promote the sustained and stable recovery of the industrial economy.
In this context, the production costs and countermeasures of related listed companies have been intensively asked by investors on the interactive platform of the Shanghai and Shenzhen Stock Exchanges.
In response, many listed companies responded positively.
Tongda Dynamics responded that the price of steel in the early period continued to rise. On the one hand, the company transferred some risks through price linkage measures and adjusting product prices with downstream customers; on the other hand, through technological transformation, the utilization rate of production capacity was increased, and the company’s Manufacturing costs to ease the pressure caused by rising raw material prices.
Looking forward to the future trend of steel prices, Zheng Lei, chief economist of Baoxin Financial, said in an interview with a reporter from the Securities Daily that infrastructure, as a key steel sector, still has a large demand in the third quarter, which still drives "steel demand". As a result, steel prices are expected to rise steadily in the second half of the year.
Chen Mengjie predicts that under the goal of "carbon neutrality", steel production will limit the supply to a certain extent, but the overall output is easy to go up and difficult to go down.
The growth rate of steel prices is expected to slow in the second half of the year, but it is still at a historically high position.
Li Zhan said that with the implementation of the "guaranteed supply and stable price" control policy, steel prices may gradually stabilize, and future growth space is relatively limited. As the Fed's interest rate hike advances and the global economy gradually returns to normal, it is expected that steel prices may gradually enter a downward channel. (Securities Daily)