Last week, the current prices of steel products all rose sharply. The State Council launched an investigation into the headwind violations and violations of individual enterprises in the steel industry's capacity reduction work, and the domestic property market ushered in a new round of regulation and control.

The latest research report issued by Nishimoto Shinkansen pointed out that the recent theme of steel capacity reduction and environmental governance has once again heated up and fermented. The supply of the domestic steel market is expected to decline further. The current hot steel market may have a boosting effect again. It is expected that the short-term domestic steel prices The rebar inventory in 35 major markets nationwide will still be 3.951 million tons, an increase of 77,000 tons, an increase of 1.99%; the stock of wire rod is 868,000 tons, an increase of 19,000 tons, an increase of 2.24%. From the perspective of the total inventory of the five varieties of wire rod, rebar, hot-rolled coil, cold-rolled coil, and plate in the country, the total national inventory is 8.55 million tons, an increase of 69,000 tons from the previous week, an increase of 0.81 %.

Qiu Yuecheng, a senior researcher at Nishimoto Shinkansen, said that national steel market inventories ended the six-week-old downward trend and turned to rise. The stocks that rose mainly were construction steel, and plate stocks were still on a downward trend. At present, construction sites in the Northeast region have basically been shut down. The Beijing-Jinji region of China has issued a wide range of environmental protection measures. Many construction sites have been shut down for rectification. Domestic steel market demand has weakened, and inventories have turned from falling to rising.

The Executive Meeting of the State Council held on November 23 pointed out that all localities and central enterprises should be guided to carry out inspection and acceptance of the task of eliminating excess and backward production capacity this year in strict accordance with the standards. . In particular, backward production capacity must be resolutely eliminated, and no equivalent replacements are allowed.

At the same time, the news shows that in response to the discovery of Hebei Anfeng Iron and Steel Co., Ltd.'s failure to first build and approve the construction of the iron and steel project, the production and sale of "ground strip steel" in Jiangsu Xinyi Small Steel Plant, and other laws that violate the law and regulations and seriously interfere with normal production and operation orders The State Council decided to send an investigation team to be severely investigated and dealt with, severely held accountable and accountable to the relevant responsible persons, and publicly notified the investigation and processing results. According to the deployment of the State Council, the two investigation teams of the State Council have gone to Hebei and Jiangsu to investigate the violations of laws and regulations of individual enterprises in the steel industry's capacity reduction work.

Relevant agency sources revealed that some steel enterprises in Hebei and Jiangsu have voluntarily stopped production to cooperate with the investigation, especially in the middle frequency furnace production enterprises in Jiangsu area. With the deepening of the investigation in the later period, it is expected that more illegal enterprises will stop production, which will have a certain impact on the overall market supply. In addition, the Ministry of Environmental Protection recently sent a supervision team to conduct special inspections on the emergency response of Taiyuan, Linfen City, Shanxi Province, and Tangshan City, Hebei Province. During the inspection, the inspection team of the Ministry of Environmental Protection found that in some cities, the emergency response measures for heavily polluted weather are not in place.

Qiu Yuecheng pointed out that the environmental protection in the later stage will continue to increase, and the production of steel companies will also be inhibited. Re-heating and fermenting the subject of production capacity reduction and environmental protection will be significantly beneficial to the steel market. With the continuous tightening of the housing market regulation and control policy, the hotspot cities have recently shown clear signs of cooling. If the cooling of the property market leads to a decline in the growth rate of real estate investment, it will have an adverse impact on the domestic steel market demand.

Nishimoto Shinkansen believes that since the housing market cooled in October, there are obvious signs of accelerated capital inflows in the field of commodities, pushing up the prices of various commodities in turn, and the market has a strong atmosphere. Therefore, although the domestic steel market is facing pressure to weaken demand in December, domestic steel prices may still have the momentum to rise further due to factors such as high costs, reduced steel mill output, and sufficient funds.