Recently, the Beijing-Tianjin-Hebei and surrounding areas of the 2018-2019 autumn and winter air pollution control of the Critical Action Plan (draft) issued to require steel, coking, foundry industry to implement part of the wrong peak production.

Tianjin, Shijiazhuang, Tangshan, Handan, Xingtai, Anyang and other key cities heating Season Steel Limited 50%, the proportion of other cities should not be less than 30%. Last week (July 30 ~8 months 3rd), the domestic steel market shocks rebound. Li Lijuan, general manager of Shanghai Securities Tianjin Sales Department, pointed out that overall, environmental protection has become the normal steel industry. August environmental restrictions will make the release of steel production constraints, August, the high temperature rainy weather receded, construction projects are expected to gradually resume, the steel market supply and demand contradictions will be eased, and the recent State Council executive meeting, the Politburo meeting transmission policy signals to boost market confidence,

　　The August domestic steel market is expected to show a strong trend of shock.

　　The main basis for making the above judgments is: First, the July steel circulation market demand boom rebound. July, the steel circulation industry PMI (Purchasing Manager Index) was 49.4%, up 1.2% from June.

　　Survey results show that July steel circulation enterprises Sales, order volume rebounded slightly, the company's confidence in the future improved, market procurement will strengthen, the August steel circulation market demand is expected to rebound. Second, demand is expected to recover gradually. From the demand for steel downstream, in early August, the high temperature and rainy climate on the construction project still has influence, but in the late, as the weather turned good, demand is expected to gradually recover. Recently, the Standing Committee of the State Council reaffirmed the expansion of domestic demand and increased fiscal expenditure. In July, 19 provinces have issued nearly 200 billion yuan of special debt as a capital accumulation. Under the relevant policy guarantee, the investment of infrastructure in the second half of the year is expected to be improved.

　　In addition, in July, the National Bureau of Statistics Services Survey Center and China Logistics and Procurement Federation issued a manufacturing PMI of 51.2%, although 0.3% lower than June, but 5 consecutive months in more than 51%, reflecting the continued stability of the manufacturing sector in the boom zone. Third, July, the domestic steel market appears to be a trend of upward shocks.

　　According to the monitoring data, as at July 31, the National Steel Composite Price index was 164.3 points, up 2.5% from the end of June, up 11%. Four, the National steel social inventory again rebound. July Steel Social inventory showed a retreat, but slowed down markedly.

　　As of August 3, social steel stocks rebounded again, the National 29 key cities in the social inventory of steel stocks of 8.4597 million tons, than the previous week increased by 161,400 tons, up 1.94%. In the July, the cost supporting effect of the mine was weakened. July, domestic iron powder prices and imports of iron ore prices have risen, affected by the decline in the price of Coke, the cost of the late market support strength has been reduced. At present, iron ore market overall volatility weakening pattern, iron ore import price gradually to 60 U.S. dollars/ton ~70 USD/ton back, into a new round of price shocks adjustment period.

　　Cost-monitoring data showed that the average cost price of the carbon billet produced by the original fuel used in July was reduced by 40 yuan/ton from June to 1.5%. Li Lijuan said that in response to the US-provoked trade war, the national policy-making sector is trying to expand domestic demand, including loose monetary policy, more aggressive fiscal policy, and faster infrastructure investment, so the domestic demand for steel will remain strong from the development trend. In addition to environmental protection under high pressure, the release of backward production has been suppressed, resulting in a further improvement in the steel market supply and demand, while the production and logistics costs, and the formation of strong cost support. In short, the steel market still exists the power of rising. But the steel price rises unceasingly, reaches the critical point to the demand formation to suppress, must guard against the market risk.

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