The export data in June seems to indicate that the export tariffs imposed on June 1 have limited impact on exports. The analysis may be due to the fact that the effect of the policy is more obvious after July due to the export inertia of steel enterprises and the implementation of export contracts. On the other hand, domestic steel prices generally declined in June, and the existence of international and domestic spreads still formed certain support for exports.
From the government's intention to regulate energy conservation and emission reduction and reduce trade surplus, the export data in June is difficult to satisfy the management. If the export data remains high after July, there is a possibility of triggering a new round of export control policies.
In the near term, the price of long products in domestic construction is relatively stable, while the price of sheet metal continues to fall. The high export and low inventory does not fully stabilize the domestic steel price, which reflects the market's pessimistic expectations for the domestic supply and demand fundamentals in the later period, more of which come from Worried about the decline in exports.
The recent unfavorable factors for domestic steel prices are: international steel prices have weakened after entering July, especially the US plate prices have dropped significantly; in the second half of the year, many hot rolling production lines have been put into production, which has a negative impact on the balance of supply and demand of plates.
Positive factors affecting the industry: China's iron ore imports continued to hit a new low this year in June, down from last month. This may mean that there is a certain reduction in domestic crude steel in June; the pressure of energy conservation and emission reduction will eliminate The strength of backward production capacity has been strengthened.
On the whole, the current steel industry has a lot of sorrow and sorrow. Although the export volume has remained high, the tax rebate reduction and tariff increase have affected the profitability of steel enterprises in at least two aspects. First, the export cost has increased; second, the decline in domestic sales prices. .
From the analysis of industry trends, the second quarter is the high point of annual profit, the third quarter will decline, and the fourth quarter will stabilize. However, we are optimistic about the prospects of the domestic steel industry in 2008, on the grounds of a rebound in demand, a decline in capacity growth and the elimination of outdated production capacity.
In the short-term, we will be cautious about the overall steel industry. The performance of the interim results and the valuation will make it a trading opportunity. We will focus on two types of companies: the valuation and defensiveness of leading steel companies; the oversold of second-tier steel companies, such as Ma Steel and Yan Steel; stock price adjustment provides better buying opportunities.
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