On January 15, 2020 (American time), China and the U.S.officially signed the first phase of trade deal, easing tensions and promoting trade between two countries. For domestic steel market, trade deal mostly exerts an impact on its downstream industries development.
According to the trade deal, the U.S. will fulfill its commitment to cancel the imposition of tariffs in stages. Without a clear time schedule and related details, it still works as a good sign for mechanical and electrical products export. Meanwhile, iron ore, steel and other varieties related to industry chain is probably to rise in the short term.
Specifically, steel product export is not greatly influenced as other industries. Steel export mainly depends on international market demand and competitiveness. In the first eleven months, China exported 778,000 tons steel directly to America, accounting for only 1.3% of the total steel exports volume. Besides, China’s steel exports face great pressure for worldwide weak steel demand and slow economic growth.
Domestic supply and demand determines the spot market development. Investment in infrastructure construction is an important driving force of the steel market after Chinese New Year holiday. According to SteelHome Survey, as of January 14, 2020, local government special bonds issued and planned to be issued have already reached 714.821 billion yuan, an increase of 406% year on year, exceeding the maximum amount of 526.7 billion yuan in June, 2019, which, significantly promotes the steel demand after Chinese New year. Therefore, the increase of market inventory, the issuance of local government special bonds and the production status of EF-base enterprises should be highlighted recently.
(To contact the reporter on this story: nancy.bu@steelhome.cn or 0086-21-50585358) |
