316L stainless steel channel steel price reverses the need to reduce production
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Today, the two cities opened sharply lower, with the real estate sector suffering a significant drop. Last Friday, the General Office of the State Council issued the "Notice on Continued Doing a Good Job in the Regulation of the Real Estate Market," commonly referred to as the "National Five" policies. These new regulations aim to curb speculative investment and high property prices, marking a more substantive phase in real estate control. The notice emphasized that provincial governments failing to stabilize housing prices will be held accountable, while also accelerating the expansion of property tax pilots.
In addition, the State Council approved further measures, including increasing the down payment ratio and loan interest rates for second-home mortgages. A 20% personal income tax will be imposed on the sale of housing. These stringent rules have dampened expectations for construction material demand, especially for products like 316L stainless steel channel steel.
Despite the market downturn, there is some optimism regarding the price of 316L stainless steel channel steel. Current inventories of major steel products, such as rebar and wire, have exceeded 20 million tons, reaching up to 21.75 million tons. In Tangshan, billet stockpiles hit an all-time high of 1.716 million tons. According to the Xunbao Steel Association, national crude steel output in mid-February reached 2.006 million tons, the highest in recent months, with member companies' steel stocks rising to 12.93 million tons—an increase of 33.4% from the beginning of the year.
With steel mills releasing large volumes of inventory, and the price of 316L stainless steel channel steel reaching a recent high, the order ratio has improved significantly. This suggests that steel mill shipments are likely to accelerate. As traders become more willing to restock, the pressure to sell quickly may increase, which could negatively impact market stability.
Although spring brings a construction peak season, high inventory levels make it difficult to expect strong price increases. Some steel companies, particularly smaller ones, have started to cut production, signaling a potential reversal in the price trend of 316L stainless steel channel steel.
On the positive side, the China Federation of Logistics and Purchasing's Steel Logistics Professional Committee reported a sharp rebound in the steel industry PMI index for February, rising by 9.6 percentage points to 58.9%, the highest since March 2011. The new orders index surged by 13.8 percentage points to 63.2%, reaching a two-year high. Meanwhile, the new export orders index jumped 15 percentage points to 63.5%, also hitting a two-year peak. This indicates growing confidence in future demand and suggests that steel exports are expected to remain strong in the coming months.