Recent large-scale iron and steel industry to resume production, investors if demand is not quick release, inventory backlog, steel or dumped goods prices again. The burden aspects, Platts index at $ 60 frontline facing greater pressure, the market outlook there are also downside risks, reduced support costs, steel prices will shock down the center of gravity.

From a macro point of view, in June and July in infrastructure investment growth slightly better than the second quarter of this year, real estate sales continue to pick up, but the transfer to investment growth does not seem smooth. This year 1–7 year, the national real estate investment rose by 4.3% nominal growth, the growth rate of 1 – down 0.9 percentage points from June. Is expected to increase the “Golden September and Silver October,” demand is difficult-than-expected margin improvement.

On the supply side, since mid-August, the National blast furnace operating rate appears a significant rebound in Tangshan parade postpartum limit operating rate close to 80% rebound from early last week to 85 percent, followed by some small steel mills will gradually resume production. And the loss rate in mills hundred dollars or less, low cost of some major steel mills as well as tens of dollars of profit, cuts will is not strong. Steel destocking greater pressure, Shagang will soon be in mid-September ex-factory price of 40 yuan / ton, and the demand for “season” contrast.

Raw materials, from late August, Brazil and Australia iron ore sent to China began to increase, expected in late mid-September to the port volume will increase substantially. The recent decline compared with coal and iron ore larger thread, this year coking enterprises operating rate continued downward, one million tons of production capacity following the coking plant operating rates dropped from 80 percent in February to the current 61 percent, 2 million tons coking plant capacity above capacity utilization fell to 67 percent, the lowest level this year, operating rates continue downward and upward demand space is not large, the imbalance between supply and demand will become more serious.

Steel and iron ore started to rebound recently become a major factor restricting the callback spot prices higher, but the price difference is large, spread down sharply needed repair futures prices in the short term. Recent volatility in steel prices is expected to mainly focus on the National Day after the peak demand could come, but limited enhance the role of steel prices.