Will steel prices go up again?

The global steel industry is in turmoil. Recently, steel prices have generally risen. Industry researchers said that domestic steel prices are brewing a wave of rising prices, which will have a positive impact on the first quarter performance of listed steel enterprises. The short-term performance of steel stocks deserves attention.

It is reported that ArcelorMittal, the global steel boss, recently announced that the price of hot-rolled coils in the United States will be raised by $35/ton, and European steel mills will also raise the ex-factory price of hot-rolled coils by 9/ton to 516/ton. At the same time, steel mergers and acquisitions in the international market are also surging, which has promoted the rise of steel prices to some extent.

As for the trend of the steel industry after the second quarter, there are still some differences in the market. In March, the third round of iron and steel negotiations began, and how much the iron ore price will rise became an uncertain factor for the performance growth of iron and steel companies. Zhou Tao believes that after the negotiation, the new iron ore price will be implemented from April. If the price of iron ore rises by 40%-50%, most steel enterprises can bear it, and the second quarter is considered as the peak season for steel consumption. It is expected that the performance of steel enterprises in the second quarter will not be a big problem. Zhao Xiang of Everbright Securities said that although steel prices may rise sharply in the short term, there is still overcapacity in the long run. On the whole, the steel industry is likely to decline, especially in the iron ore negotiations in March, with great uncertainty.

The steel industry is in a boom period. Benefiting from the renewal cycle of steel products in developed countries and the industrialization process in developing countries, the steel industry will enter the golden growth period of 10~ 15. The elimination of backwardness, merger and reorganization and internationalization have made China iron and steel industry in a very long boom cycle. In 2008, the steel price is expected to continue to rise by more than 10%, which can not only absorb the rising cost factors such as iron ore and coal, but also improve the profitability of the industry.

The value of heavy assets needs to be revalued. The increasing investment and replacement cost per ton of steel in iron and steel enterprises, coupled with the restrictions of industrial policies on new steel production capacity, have improved the hidden value of existing iron and steel enterprise assets.