Posted on 10 Aug 2012
The global economic downturn was witnesses by many countries all around the world. Let’s take a look at the economic indicators in different areas.
US- data released by US Department of Commerce on Jul. 27, 2012 show that the Q2 GDP increased by 1.5 percent month on month, the growth rate of which hit the lowest level since Q3 of 2011.
Besides, the monthly newly-added jobs in Q2 averaged at 75,000 ones, far lagging behind 226,000 seen in Q1. The houses sales declined 5.4 percent in June, indicating soft real estate sector.
Additionally, July U.S. PMI index issued by Markit was merely 51.8 points, far less than 52.5 in June and firstly reaching the lowest level since July, 2009.
Spain- statistics from INE told us that Spain’s Q2 GDP withered by 0.4 percent month on month and 1 percent year on year. The protracted debt crisis and falling market confidence force more enterprises to fire more employees, consequently, Spain’s unemployment rate in Q2 skyrocketed to 24.6 percent, recording the highest level since 1976.
Euro-zone- July PMI index of euro-currency group came to 46.4 points, contracting for six consecutive months. And the manufacturing PMI index for July dropped to 44.1 points, less than expected 45.3 points and 45.1 points in June. More severely, the economy of Germany and France, core members of Euro-family, is shrinking with the fast speed. This demonstrates that major developed countries are entering economic downswing track.
China- China’s GDP in H1 came to 22.7098 trillion yuan, increasing 7.8 percent year on year. But the increase rate was 1.8 percent slower than the same period of last year. On the latest IMF economic outlook report, 2012 China’s GDP growth rate outlook was downgraded to 8.2 percent.
For major steel-consuming industries, whether real estate and automobile industry could drive up steel demand worth our attention.
In Jan.-Jun., 2012, the fixed assets investment in cities and towns came to 15.0710 trillion yuan, with nominal growth of 20.4 percent year on year. The growing rate went down 0.5 percent compared to Q1 and 5.2 percent versus the same period of 2011. Meanwhile, national real estate investment hit 3.0610 trillion yuan, with nominal growth of 16.6 percent year on year. But the growth dropped down 6.9 percent compared to Q1 and 16.3 percent versus the equivalent time of last year.
China Association of Automobile Manufacturers reported that China produced 1.5313 million sets of automobiles in June, up 9.09 percent year on year while down 2.37 percent month on month. Besides, the sales volume was 1.5775 million sets, increasing 9.86 percent year on year while decreasing 1.66 percent month on month.
In response to sliding prices and huge losses, most steel mills are on the road of production cut and maintenance, which would function to calm down and stabilize steel price in future.
1. Following a long streak of losses, most steel prices fell down to the production cost line and market risks have been released. Now, there’s less incentive for further decline and market sentiments tends to be more stable.
2. Domestic crude steel production is on the downsizing trend. Data from China Iron and Steel Association show that the total crude steel production in H1 was 357 million tonnes, just up 1.8 percent year on year. Meanwhile, the total production of 74 steel mills dropped 0.1 percent or 310,000 tonnes year on year.
3. The falling steel inventory lessens supply pressure, owing to maintenance and product mix adjustment. As of Aug.3, 2012, rebar inventory at 26 markets stayed at 6.5 million tonnes, contracting for six consecutive months.
4. High production cost support steel price to move stably. Although steel prices tumbled sharply, the raw materials prices edged down marginally.
In view of favorable factor, steel price may stop and tends to be stable in robust season of September and October.
