Huaihua Settlement Observation Point Nationwide Shipping Cangzhou Shuntian Honest Merchant

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　　Huaihua Settlement Observation Point Nationwide Shipping Cangzhou Shuntian Honest Merchant

　　Since the beginning of the year, with the issuance of multiple "14th Five Year Plan" national plans and the clarification of stable growth policies by various ministries and commissions, the confidence in the domestic steel market has continued to increase, and the black market has continued to rise. However, the steel market has only followed in small steps, resulting in a situation of "strong expectations" vs. "weak reality". Therefore, whether the strong expectations of this year's "winter storage" can be fulfilled has become the focus of attention from all parties. The author will analyze from the following aspects.

　　Firstly, from the supply side, considering factors such as ensuring supply and stable prices, off-season demand, and the Spring Festival holiday, as well as the impact of autumn and winter production restrictions in northern regions, the capacity release of major long process steel production enterprises will show a fluctuating and stable trend. At the same time, due to the high scrap steel prices and the rise in energy prices, the capacity release of major short process steel production enterprises will be limited. The overall capacity release of the steel supply side will be weaker than the same period last year, but higher than the level in the fourth quarter of last year. Therefore, in early 2022, domestic steel production will maintain a weak and stable fluctuation trend, and it is expected that the daily crude steel production in the country will remain at around 2.6-2.7 million tons in the first quarter.

　　Secondly, from the perspective of demand, since December last year, multiple "14th Five Year Plan" national plans have been issued one after another. Among them, the national plans that have a significant impact on steel demand are: "14th Five Year Plan for the Development of Intelligent Manufacturing", "14th Five Year Plan for the Development of Big Data Industry", "14th Five Year Plan for the Development of Robot Industry", etc. The most important one is the "14th Five Year Plan for the Development of Modern Comprehensive Transportation System" issued yesterday, which also specifies that during the "14th Five Year Plan" period, China will add 19000 kilometers of railway operating mileage, 302000 kilometers of highway opening mileage, 2400 kilometers of high-grade inland waterway mileage, more than 270 civil transportation airports, and about 10000 kilometers of urban rail transit operating mileage. At the same time, with the accelerated pace of local special issuance since the second half of last year, as well as the accelerated progress of central budget investment, a cumulative effect will be formed in the first quarter of this year, which is conducive to promoting the construction progress of major domestic projects during the 14th Five Year Plan period and also helps infrastructure investment play a role in supporting the economy.

　　Overall, although the northern region is about to enter the autumn and winter production restriction period, the need to hold a meeting will significantly increase the implementation of production restrictions, and the supply side will show a weaker trend than in previous years. The domestic steel market has entered a situation of "stable supply and weak demand", and the domestic steel market has also begun to accumulate inventory. However, the firm prices of raw materials and strong cost support in the steel market have also led to high prices of "winter storage". The enthusiasm for active "winter storage" is not high, but passive "winter storage" still exists. At present, the situation of "strong expectations" vs. "weak reality" in the domestic steel market will continue, and the high price of "winter storage" will constrain the degree and progress of realizing "strong expectations". However, at the same time, the game between downstream demand release and rapid supply recovery after spring should also be considered.

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