Starting in Sep 2020,China's raw materials have entered an upward trend.In particular,it accelerated in Dec,it has a great impact on the fastener industry,whether it's production、trade and the end user,all of them are experiencing tremendous pressure.At the same time,the us dollar exchange rate continues to decline,the rising sea freight is under the attack from both sides,profits are shrinking and even losing money,QBH company are hardly immune,the main reasons behind it are as follows:
1、The main factors leading to the rising price of steel raw materials are iron ore and coke,the main sources of China's iron ore imports are Australia Brazil and India,due to the deterioration of Sino-Australian relations,as a result,it is becoming more and more difficult for Australian iron ore to export to China,The other two countries are affected by the COVID-19,and the amount of exploitation is decreasing compared with the past,as for China's port stocks,they are falling very fast,thus providing a strong support for the rise of iron ore.In addition,China's coke is mainly a combination of domestic and imported,but in recent years,the Chinese goverment has implemented supply-side reforms,including coke,many small and medium enterprises that do not meet the requirements of environmental protection have been shut down,resulting in resources being entirely in the hands of SOE,plus the peak demand in winter,this has further pushed up the price of coke.
2、Due to the influence of the COVID-19,central banks around the world continue to implement monetary easing policies,further pushing up commodity prices.
3、Early 2020,the Chinese govement has brought the epidemic under control with a strong hand,domestic production has resumed in an all-round way,at the same time,we should vigorously develop infrastructure constuction to stimulate the economy,as a result,the demand for steel is very strong.However,the control of the epidemic in foreign countries is relatively poor,especially in India,most enterprises are in a state of shutdown or semi-shutdown,many international orders have flowed to China,which has further stimulated the rise of raw materials.
In 2021,steel prices entered a high consolidation stage,with the arrival of the cold weather and the rebound of the epidemic in some parts of China,some construction sites are in a state of shutdown,which has suppressed the price of steel to a certain extent.It is expected that there will be a shock stage before the Spring Festival,after the Spring Festival,the price of raw material is expected to rise slightly until about June,the time node is roughly at the turning point of the epidemic,but there are several specifal factors to pay attention to:
A、If the COVID-19 in China becomes serious,it will have a huge impact on commodities,and the steel price will also plummet directly.
B、If the further deterioration of the epidemic abroad,iron ore prices continue to hit new highs,will further affect steel prices.
C、It mainly focuese on some economic policies of the Chinese govement in March 2021,which will guide steel prices.
The above points are only the presonal views of JIAXING QUNBANG HARDWARE CO.,LTD Mr Lance,and don't constitute a trading proposal.
QBH company is a professional manufacturer of fasteners and supplier,such as hex bolt、hex nut、 wahser、therad rod and so on,welcome to further contact and understanding with us.