Baosteel's steel for automobiles in July dropped 1,000 yuan / ton
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Zhang Lin believes that due to the decline in automobile production and sales, the reduction of orders for home appliance companies, and the overcapacity of shipbuilding enterprises, not only the long product series affected by real estate regulation and control policies are damaged, but the end users of the plate series are also exhausted. According to the report of the automobile industry operation data released by the China Automotive Technology and Research Center in May, the total vehicle production in the domestic automobile market was 1,312,700 units in May, a decrease of 13.95% from the previous month, and sales of 1,194,700 units, down 13.95% from the previous month. The steel mills reduced production by a small margin, and steel traders did not purchase positively, which caused the mills to lower the ex-factory price. On the other hand, domestic crude steel output reached a record high in April, far greater than the growth of market demand, and the contradiction between supply and demand emerged. Inventories remain high, and downstream demand has cooled down and steel prices have stabilized in June.
Regarding the current hot iron ore negotiations, Zhang Lin said that Baosteel's cut in ex-factory prices has a positive impact on the negotiations.
Recently, foreign news reports that the iron ore contract price will continue to rise by 30% to 35% in the third quarter. Vale CEO Arganelli said recently that iron ore prices will increase further in the second quarter. According to relevant analysts, due to the decline in steel prices, the current spot price of iron ore in the domestic market has dropped back to around US$150/ton. If Vale is again increasing its price by 35% to US$145/ton, the iron ore contract price and The market price will be almost the same.