Steel price will fluctuate and rise in 2020

According to the data monitoring of jinlianchuang, 2019 is a year of change in the supply situation of the strip steel industry and the transformation of new and old kinetic energy. It is a year of resolving the contradiction of serious overcapacity. It is also a year of "environmental storm" with the longest time, the largest intensity and the widest area in history. As a result, a large number of enterprises stop production, rectify and punish, the number is unprecedented. However, the game between supply and demand and the implementation intensity of environmental protection policies are still the focus of attention in 2020. Although the strip steel market in 2019 is acceptable, looking forward to the market prospect of "13th five year plan" and longer term, China's steel production capacity has entered the trend of reducing development. Steel demand is expected to increase slightly in 2020, up 2% year-on-year. According to China steel consumption forecast released by China Iron and Steel Industry Association, the market demand of steel industry in 2019 is good, and the steel consumption in 2019 is expected to be about 880 million tons, up 6% year-on-year.

Due to the shortage of natural gas energy supply caused by the end of "coal to gas" in the narrow strip production enterprise, and the continuous increase of natural gas price, the increase of narrow strip production cost, coupled with the low inventory and the tightening of supply end, the strip steel price still shows a significant upward trend. In 2020, China's steel demand growth will slow down, production capacity will be released greatly, and the trend of supply exceeding demand is obvious. CISA expects China's steel demand to be 890 million tons in 2020, an increase of 2% year on year. This lower growth rate is close to the previous forecast of the world iron and Steel Association, which predicted 1%. In 2020, China's steel demand growth will slow down, production capacity will be released greatly, and the trend of supply exceeding demand is obvious. At present, the domestic steel production capacity is at the peak of release, mainly because the steel industry is in a new round of adjustment period under the influence of the "de capacity" policy in the past few years. On the whole, in 2020, the steel market will continue the situation of double contraction of supply and demand, but the contraction of supply may be greater than the contraction of demand, which will form a good support for the steel market. Although it is sometimes disturbed by the increase of festival inventory, under the background of macro expected repair, steel prices are expected to start a new round of upward trend in 2020, so the overall steel prices will fluctuate and rise.