Tianshui Observation Point Displacement and Settlement Observation Pile Production Plant

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　　Tianshui Observation Point Displacement and Settlement Observation Pile Production Plant

　　At the end of December last year, the inventory of rebar began to increase. As of January 20th this year, rebar prices have slightly decreased, and consumption has remained at a daily level of 30% to 40%. However, since January, the price of rebar has risen by 11.5% in the past 20 days. Why does the steel market experience a hot market in the cold winter? Why has there been a situation of 'no movement, solo dance'? From recent data, we can see one thing or two clearly. On the supply side, in January, on the basis of completing the task of reducing crude steel production last year, the supply side began to relax moderately. According to statistics from the China Iron and Steel Industry Association, in early January, the daily crude steel production of key steel enterprises in China slightly decreased compared to the previous month, while the production of pig iron and steel increased. Considering that there will be the National People's Congress and the Chinese People's Political Consultative Conference in February and March, the policy of restricting production after the Spring Festival is uncertain. In terms of inventory, since the end of last year, the inventory of rebar has increased for three consecutive weeks, with a year-on-year decrease of 22.59%. In addition, the apparent consumption of rebar decreased by 21.1% year-on-year. On a macro level, the Ministry of Industry and Information Technology has proposed that crude steel production capacity will only decrease and not increase during the 14th Five Year Plan period, and there is no clear requirement for reducing production in 2022. Industry insiders predict that the crude steel production reduction policy will continue to be implemented in 2022, which may result in a reduction of about 20 million tons. In addition, a prudent monetary policy and an active fiscal policy remain regular drivers of stable economic growth. In terms of demand, in the real estate sector, since the beginning of New Year's Day, many places have lowered the interest rates for first-time home loans; On January 19th, the central bank announced a 5 percentage point decrease in the 5-year LPR (market quoted interest rate), coupled with the expectation that real estate merger and acquisition loans will no longer be included in the "three red lines", dispelling concerns about the risk of existing real estate projects and promoting the real estate industry. In the field of infrastructure, as of early January, more than 11 provinces in China have organized major project commencement activities for 2022, involving over 5000 major projects and a total investment scale of over 3 trillion yuan. Manufacturing investment will also maintain a medium to high growth rate. Overall, under the expectation of reduced production, inventory remains low year-on-year, real estate rebounds, and combined with major events such as the Olympics and the Two Sessions, the effective construction period this year may be reduced by 60 days. Under the combined influence of these factors, the trend of steel prices is worth looking forward to.

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