According to the CCTV Economic Voice ‘World Finance’ reported that this year the steel market started significantly earlier than in previous years. Shortly after the Spring Festival holiday, domestic steel has risen in price, billet and various categories of steel prices short-term are several hundred dollars per tonne. What is the reason for the early start of the steel market? How is the downstream demand this year? Steel prices can be maintained at a high level for how long?

Just a few days after the Spring Festival holiday, the steel market has been the sound of price increases in all directions. Tangshan billet ex-factory price has more than 4100 yuan / tonne, than before the Spring Festival rose close to 300 yuan / tonne. Five varieties of steel prices have followed suit, up 100-300 yuan / tonne. Compared with previous years, this year the steel market started significantly earlier, and the rate of increase is also greater. Some analysts believe that this is because all kinds of construction projects and enterprises to resume production in advance, releasing the demand for steel. More analysts believe that rising steel prices are mainly cost-driven. China Iron and Steel Industry Association, vice president and secretary-general Qu Xiuli in the analysis of this year's situation in the industry has mentioned: ‘Currently iron ore, coal, coke and scrap prices, which are steel production of raw materials, are at a high level, and still a rising trend. Then business costs are facing upward pressure, and last year's fourth quarter of some of the price factors may be some of the continuation of the impact to this year.’

Specifically, in terms of iron ore, imported 62% powder ore CIF price has exceeded 170 U.S. dollars / tonne, a record high in nearly 10 years. In coal, coking coal and coke prices are still at a high level, although both have recently fallen sharply. The industry said that the current international market capital side of the overall loose, iron ore and other commodities and strong rising expectations, which will naturally push up steel prices. Insiders said: ‘The main reason for the rise is still the Spring Festival period of the international financial markets, capital markets have risen sharply. Crude oil or, non-ferrous metals or, foreign stock markets or, have risen substantially. The United States launched an economic stimulus plan, then the market is expected to bring stimulus to the demand for commodities.’

For the next steel price trend, the industry believes that mainly depends on the supply and demand situation. The Ministry of Industry and Information Technology is currently studying the development of steel to production work programme, the implementation of production capacity, production of dual-control policy, to ensure that this year's national crude steel production fell year-on-year. At the same time, steel demand expectations are still optimistic. The China Steel Association previously judged that this year's demand will grow slightly. Wang Lianzhong, vice president of the All-China Metallurgical Chamber of Commerce, also believes that steel demand will remain high in the next few years. Wang Lianzhong said: ‘We are constantly fluctuating on higher product demand. Demand forecasts also vary, some may say 1.1 billion tonnes, some say 1 billion tonnes. But over the next few years, we expect demand for steel to remain high.’