Investment Strategy steel structure industry in 2010: supply and demand tend to improve
The cyclical nature of steel industry shun fully reflected in the global field of vision. Production, the world’s steady growth, the Chinese release of the most obvious; demand, steel demand growth center in India, Europe and the United States in 2010 on a modest rebound in demand; steel prices, the global initial stabilized, China has now slightly higher; steel compamys profitable on the significant get improved in Asian countries, but Europe and the United States is still difficult.
Chinese steel demand and supply quantity differences will be narrowed gradually solve this contradiction . 2010 production capacity utilization rate will be keeped at 80-90% level; forecasts in 2010 crude steel output or an increase of 3%; iron and steel demand in the real estate, infrastructure, automotive industry, stimulated by the three leading full-year 2010 growth of 8.3%, so contradiction between supply and demand will be solved.
Factors determine the upper and lower steel prices will show a trend of steady enhanced. Iron ore prices regain upward, coke, steel scrap, pig iron prices will push up steel prices stabilizing, steel futures also showed significant bullish expectations; but the lower the price of finished products to suppress the formation of steel prices rising, so we expect steel prices does not appear twists and turns, as a whole will show a trend of steady uplift.
China’s steel industry in mixed operating environment. Iron ore was first proposed in the pricing of the "China model", efforts to increase iron ore negotiations on the right to speak, to reduce steel prices cost pressures; trade protectionism hinder China’s steel exports, deterioration of the domestic supply and demand relationships; the Government is raising export tax rebate rate, eliminate backward production capacity greater efforts to a certain extent, improve the domestic steel industry operating environment.
China’s steel prices in the third quarter profitability improved significantly, and the steel is better than S & P steel, long products than flat materials, sub-species point of view, we continue to be optimistic in 2010 steel and long products.
2010 year for the steel industry will be in high tolerance, the current PB values of iron and steel industry, 2.0 below the historical average of 2.1, more reasonable, and based on steel prices rebound has emerged, the industry recovery around the corner, thus bringing shares rose more determined We therefore optimistic about the performance of the steel industry next year, to give "strong in the big city," investment rating.
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