What are the dominant factors in the steel market in the second half of 2020?


From a global perspective, the epidemic situation outside the country is more serious, among which the number of deaths in the new crown of the United States has exceeded 100,000 and is still rising. Nowadays, some countries are forcibly "unsealing" and resuming production in spite of the serious threat of the epidemic, although this can increase current demand and may eventually lead to collective immunization, or the successful development of vaccines and potent drugs to weather the crisis and accelerate the start-up of the global economy. At the same time, the forced "unsealing" of the epidemic despite the danger may lead to the outbreak of a second wave of the epidemic before the first wave is fully contained. If some countries and regions become new "epicenters" of the epidemic, the external environment for China's steel market will be even more severe. As a result, uncertainty about the direction of the epidemic outside the country in the second half of the year has made the external environment of the Chinese steel market very confusing.

At this stage, the epidemic in Brazil is serious, and the emergence of a worse situation cannot be ruled out. This makes future Brazilian iron ore production and logistics shipments somewhat troubling. In addition, Australia's recent delicate relationship with China and geopolitical ties could also produce disruptions to iron ore supplies outside the country. By its impact, the second half of the national iron ore imports will also have a certain degree of uncertainty, low inventories, reservoir effect is likely to continue to exist, difficult to cope with unexpected circumstances triggered by sharp fluctuations in supply and demand. And a higher volatility in iron ore prices can lead to a full-scale steel market shock. In this regard, the relevant enterprises need to be prepared for the rainy day and pay attention to prevent.



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