The hottest steel market may need to adjust the su

2022-08-17
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The steel market may need to adjust the supply expectation of steel mills with environmental impact

in the past two to three years, benefiting from the implementation of the two major policies and measures of capacity reduction and environmental protection, the domestic steel market has been very eye-catching. Especially since 2017, the steel price should be a typical supply constraint driven market caused by policies. Any information about specific policies and measures affecting supply such as environmental protection has always affected the market nerves

for a period of time since the end of last year, the author once believed that the marginal impact of environmental protection on steel supply would decline this year. However, the intensity of Jiangsu's spontaneous environmental protection self-examination in April was really unexpected. Even if the competent department issued a "one size fits all" working opinion on banning environmental protection at the end of May, it seemed that it did not see any impact on local spontaneous environmental protection and production restriction, Therefore, we realize that environmental protection may have replaced GDP as the primary task of the local government. Then in mid June, the National People's Congress deployed the three-year action plan for the blue sky defense war. Looking at Baidu's order of 100 million, we understood the plan. In early July, the "three-year action plan for winning the blue sky defense war" was officially issued, and the scope of key work was expanded from 2+26 last year to Beijing Tianjin Hebei, the Yangtze River Delta and the Fen Wei plain... With the upgrading of environmental protection work, the market's expectation of environmental impact supply is also constantly strengthened, The market is also booming under this expectation

however, based on the analysis of the current situation, the market's expectation of the impact of environmental protection on supply may need to be adjusted

first of all, the trade war continues to stimulate and deepen, and the resulting changes in the concerns of decision-makers. Various messages indicate that we should be prepared for a protracted war, which means that we should also be prepared to deal with all kinds of negative impacts caused by the trade war

among these possible countermeasures, the first to be seen is to reduce the reserve requirement and accelerate the speed of fiscal expenditure in late April, fine tune the new rules and regulations of asset management in late July, and propose to do a good job in the "six stability" work at the end of the month, deleveraging and slowing down... However, from the data point of view, the fiscal expenditure in the first seven months has not seen the expected acceleration, "six stability" work may need to be considered and arranged in a larger scope and with greater efforts. Therefore, we have noticed that in early September, the national development and Reform Commission held a symposium of industry associations on the employment situation. In August, a steel plant in East China stopped production because of environmental protection. Recently, it has also resumed production rapidly... Leaders are increasingly concerned that the economic downturn may lead to employment pressure and other issues. In this case, many enterprises have been stopped production and limited production for the sake of environmental protection, which is becoming more and more inappropriate

secondly, I want to mention that manual switches should be installed on the wires to control the source of the experimental motor. What reminds everyone is that the requirement of prohibiting environmental protection across the board is the most frequently mentioned by the environmental protection department before. Recently, the level of this requirement has been further improved. On August 29, the head in charge presided over a special working meeting on air pollution prevention and control to review the action plan for the comprehensive treatment of air pollution in autumn and winter in Beijing, Tianjin, Hebei and surrounding areas, and made it clear that "we should adhere to everything from reality, not increase the pace at all levels, not increase the speed at all levels, and stick to the goal of continuous progress,... For enterprises that meet the relevant emission standards, we should not arbitrarily ask for shutdown, and effectively protect the legitimate rights and interests of enterprises"

third, the adjustment of the relevant contents of the official document of the "action plan" that has been widely circulated in the industry recently. Although the official document has not been released yet, the official in charge of the department mentioned in the article "the actual record of the regular press conference in August" that "from October 1, 2018 to March 31, 2019, the average concentration of fine particulate matter (PM2.5) in Beijing, Tianjin, Hebei and surrounding areas decreased by about 3% year-on-year, and the days of severe and above pollution decreased by about 3% year-on-year." Compared with the "requirements of the exposure draft circulated in early August," from October 1, 2018 to March 31, 2019, the average concentration of fine particulate matter (PM2.5) in Beijing, Tianjin, Hebei and surrounding areas decreased by about 5%, and the days of severe and above pollution decreased by about 5% year-on-year. " In terms of this content, there is no doubt about the data reduction

objectively speaking, the reduction of PM2.5 concentration by 3% or 5% is not much different. According to the competent department, from January to August, the concentration of domestic PM2.5 decreased by 7.1% year-on-year; The concentration of PM2.5 in "2+26" cities in Beijing Tianjin Hebei and surrounding areas decreased by 18.6% year-on-year in August, and 15.9% year-on-year from January to August; The concentration of PM2.5 in 11 cities in Fen Wei plain decreased by 5.0% year-on-year in August, and the concentration of PM2.5 from January to August decreased by 7.8% year-on-year. Except that Fenwei plain is 5%, others are far higher than 5%, while fenweiping 1. It is clear in the industry how to estimate the maximum tensile force according to the shape and size of the sample and the expected tensile strength of the material

however, this does not mean that the adjustment figure of the review draft is meaningless. On the contrary, it is of great significance. The author understands that on the one hand, it is necessary to provide some relief for the nervous protection of the first 100000 ton thermoplastic composite intelligent factory around China, which will be built in 2019, so as not to be too hard, simple, rough and paranoid on the one hand, regardless of the actual feelings and experiences of compliance enterprises and ordinary people, on the other hand, it will also provide more space for the "six stability" work

in fact, the year-on-year decrease in the number of days of heavy pollution was adjusted from 5% to 3%, which also reflects the spirit of decision-making level to be more realistic. According to the competent department, the average number of good days in China in the first eight months increased by only 1.1 percentage points year-on-year, the proportion of average good days in Beijing Tianjin Hebei and surrounding "2+26" cities from January to August was the same year-on-year, and the proportion of average good days in 11 cities in Fen Wei plain from January to August increased by 0.6 percentage points year-on-year

finally, it should be pointed out that the prices of basic raw materials such as steel and cement continue to be high, and the cost pressure is relatively large for downstream enterprises. If it is only because of market reasons, downstream enterprises will recognize it, but if it is because of policies that profits are unfairly distributed in the whole upstream and downstream industrial chain for a long time, it is conceivable that many small and medium-sized enterprises are dissatisfied. In China, according to statistics, small and medium-sized enterprises account for more than 90% of the total number of enterprises in the country, and the number of employed people accounts for about 80% of the urban employed population. Undoubtedly, the healthy and stable development of small and medium-sized enterprises is of great significance to the "six stability" work. This is one aspect

on the other hand, the continuous rise in raw material prices will also bring great upward pressure on CPI in the future. Under the current situation of various contradictions and complexities, the policy should be highly sensitive to inflation. According to the latest data, PPI rose 4.1% year-on-year in August, and CPI rose 2.3% year-on-year, an increase of 0.2 percentage points over the previous month

perhaps, the logic and expectation of environmental protection constraint supply that has dominated the market for more than two years may be undergoing some changes at present

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