Why has the steel price been rising crazily in China ?

As we know, the steel price in China used to keept rising crazily, actually not only in China, steel price of all over the world is going up. But why this situation is so fierce in China? In the past 60 days, steel price in China increased about 450 RMB. And in the past 2 weeks of last Dec, it was rising nearly every day. Reasons are as follows:

1.To loose the monetary policy. By increasing the amount of currency in circulation to balance the international payments, reduce the inflation, and make the economy go well.

2.Stimulated by the macro policies, to activate the domestic demands. Export was impacted by the Novel Coronavirus this year, domestic trading is turning to play more important role than export business.

3.Ready stock of steel decreased fast, it can not fulfill the market consumption because of the large sudden request of steel, so shortage of stock also caused price rising.

4.By the influence of COVID-19, the ready stock of steel in foreign countries is not enough either. A lot of orders went to China where the epidemic situation is already stable. This caused the order explosion with steel factories, delivery time of some factories is already 90 days.

5.Price of raw material is still strong. Due to the production restriction to Chinese governmental factories, the price of steel billets and hot rolled coils is still at a high level.

From the beginning of January, steel factories will stop taking orders gradually because their orders will be saturated, more over, Chinese New Year is approaching in the beginning of February, predict that it is not likely for the steel price to go down before it, actually it may hold even till the fist quarter of next year. Of course, cannot deny the possibility of the falling in price, just the range may not be big. So under this circumstance, all orders are better to be finalized within this month, no later than the beginning of Feb.

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