Mr.Wu
Wenzhang, Board Chairman & Founder of SteelHome, lately introduced his
viewpoints on current steel market.
Certainties
1
Chinese government will conduct production limitations on steel during
Beijing Winter Olympic Games;
2
Chinese government will make efforts to stabilize economic growth instead
of seeing a downfall in the fourth quarter;
3
The capital supply at the end of year will be contracted, but more fund
will be pumped into market thereafter.
4
Thermal coal price has been stabilized, with sufficient coal stockpiles at
power stations.
Uncertainties
1
Market demand to recover or not?
2
With eased macro control on property, many construction sites in China are
re-started up. However, the effect of the policy is uncertain.
The
market participants are suggested to find opportunities buried in
uncertainties. Meanwhile, we should warn that the risks of uncertainties
tend to be covered in certain events. For instance, the annualized crude
steel production in China has fallen from August’s 1.14 billion tons to
0.84 billion tons in October, accompanied with weak market. It reflects
that the steel cutbacks, the certain one, generates uncertainties, such as
government’s hands on coal market and sluggish steel demand.
Wu
Wenzhang, Founder with SteelHome |