Ren Qingping: steel traders should not expect "new infrastructure" to bring high prices of building materials

"steel traders should fully recognize the 'steel demand' changes brought about by the new pneumonia epidemic, strive to survive in difficult times and wait for the opportunity brought about by the next round of economic recovery. " In view of how steel trading enterprises deal with the new changes and new environment in the steel market under the epidemic situation of new coronary pneumonia, shanghai Wubo Steel Structure Materials Co. , Ltd. . Chairman Ren Qingping in an interview with the "China Metallurgical News" reporters said. Overseas epidemic chain reaction on the impact of China's steel city can not be ignored, Ren Qingping said, the epidemic led to the first quarter of this year's steel demand strength weakened reality can not be ignored. In order to prevent the spread of the epidemic, from February to March, most of the upstream and downstream enterprises in the steel industry delayed the start of construction, many major construction projects stopped, and the real estate market cooled down sharply, which caused a greater impact on the domestic economy in the short term. In January and February, fixed asset investment excluding rural households was 3,332.3 billion yuan, down 24.5 percent year on year, according to the National Bureau of Statistics of the People's Republic of China. Investment in infrastructure fell 30.3 per cent year-on-year, down 34.1 percentage points from December, while investment in real estate development nationwide fell 16.3 per cent year-on-year, down 26.2 percentage points from December. On a month-on-month basis, fixed asset investment excluding farmers fell 27.38 per cent in February. From January to February, the value added of industries above the scale fell by 13.5 per cent in real terms, compared with a 26.63 per cent month-on-month decline in February. From January to February, the foreign trade data also showed a poor performance. The total value of China's imports and exports decreased by 11.0% year-on-year, of which the total value of exports decreased by 17.2% and the total value of imports decreased by 4.0% . "As a result of the impact of the epidemic, domestic economic construction has been affected, steel demand has also decreased significantly, inventories have risen significantly, and manufacturers' sales pressure has increased, " Ren said. Statistics from the China Iron and Steel Industry Association showed that in the first ten days of March, the social inventory of five major steel varieties in 20 cities was 20.21 million tons, an increase of 1.16 million tons or 6.1 percent over the previous ten-year period, and an increase of 13.39 million tons or 196.3 percent over December 2019. From the stock increase of major steel varieties, rebar, wire rod and other construction steel stock increase the largest, at an all-time high. And Steel social inventory and steel mill inventory both climbed, leading to a sharp decline in steel market prices. In February of this year, the price of rebar in the Shanghai market dropped 360 yuan / ton, the price of high line dropped 290 yuan / ton, the price of cold rolled coil dropped 230 yuan / ton ~ 290 yuan / ton, the price of hot rolled coil dropped 380 yuan / ton, and the price of medium and heavy plate dropped 180 yuan / ton ~ 220 yuan / ton. February of this year, the price of steel fell by a large amount, for the same period rarely seen in previous years. With the recent domestic epidemic gradually under control, enterprises to speed up the pace of resumption of production, a large number of major infrastructure projects around the resumption of construction, steel demand has gradually improved. However, Ren Qingping pointed out that the current domestic downstream of the resumption of steel enterprises are not the same situation, all resume work will take time. In addition, the epidemic prevention and control can not be relaxed. These, are the uncertainty factor that affects later period"steel needs". In particular, Ren Qingping pointed out that the new crown pneumonia epidemic in the world's rapid spread, leading to the impact of the world's major economies, of course, will also affect China's foreign trade, China's steel exports face the situation is not optimistic. Data from the General Administration of Customs on March 7 showed that from January to February 2020, China's exports of steel totaled 7.811 million tons, a year-on-year decrease of 27.0 percent. If the global epidemic continues to worsen, China's steel export situation is difficult to improve, which will directly affect the domestic steel market trend, or will exacerbate the contradiction between supply and demand in the domestic steel market. Do not expect "new infrastructure" will bring high prices of building materials, in the impact of the epidemic, the steel market faced with changes in the environment, the impact of "steel demand" increased variables, in this state, steel traders how to respond? To this, Ren Qingping gave his suggestion. First of all, the steel trade to do a long-term psychological preparation. As far as the current outbreak is concerned, the domestic epidemic situation is gradually being brought under control, but the epidemic situation abroad is still raging, and the impact and impact on the world economy may continue to increase, which will also affect our economy, will directly affect the "steel demand" changes. Therefore, whether it is domestic or global this year, "steel demand" strength is limited, steel traders should have a full psychological preparation. Secondly, steel traders in business, do not copy the bottom of the goods, blindly Bo market. "This is because we never know where the 'bottom' is, " Ren said. Steel traders still need to work steadily and prudently, adhere to the business strategy and marketing model of "less hoarding and faster delivery, " and adhere to service to win the market, the more the steel market continues to be weak and prices fluctuate sharply, the more we need to enhance service awareness and establish a mutually beneficial community of destiny with downstream end-users to jointly address the crisis and challenges brought by the epidemic, so that steel traders in the service to win customers, win the market. Thirdly, steel traders should pay attention to the new demand and new characteristics of "new infrastructure" . For Steel Traders, with the "new infrastructure" construction efforts to increase, there will be a new "steel demand" and new customers. For example, according to the new energy vehicle industry development planning 2021, the ratio of vehicle to pile is estimated to be 1:1 in 2025, the domestic need for about 7 million charging piles. The charging pile mainly includes equipment main engine, cable, column and other auxiliary materials, which involves the use of steel is column. Small-sized charging piles use less steel, large-sized charging piles will involve some supporting steel, roughly calculated at an average of 0.5 tons per pile, 7 million charging piles need about 3.5 million tons of steel, which will undoubtedly become a new bright spot of "steel demand" , it is worth seeking new customers and opening up new markets for steel traders. But Ren Qingping stressed that the "steel needs" of the "new infrastructure" and the "steel needs" of the traditional infrastructure are different. "New infrastructure" has a high investment density but a low steel density. In addition to UHV power transmission, high-speed railway and rail transit construction of large quantities of steel, 5g base station, big data center, industrial internet and other construction of steel used are mostly high-quality steel, special steel and so on, demand is limited; Because this kind of infrastructure project construction cycle is generally long, to the steel demand pull is also limited. Therefore, the steel traders do not expect "new infrastructure" will bring high prices for building materials.