Steel Raw Material Price Keep Soaring.

Since the beginning of this year, raw materials such as wood, sponge, chemical coating materials, non-ferrous metals, and even cartons have been rising, and prices of some categories have even doubled. For example, non-ferrous metals have risen by about 50%, and soft foam poly-ether, an important raw material for sponge foam, has risen by 126.74% in the past four months.

On Focus, steel raw material price has been keeping up since Jan, 2021. Nowadays, after Spring Festival, it’s still in a trend of growth.

Main factors are as bellows:
● The output of steel in 2020 is lower than the output in 2019
● Ministry of Ecology and Environment: Actively promote iron and steel, coal and other industries to resolve excess capacity
● Machinery industry demand market will continue to recover, and the operating environment is expected to continue to improve.

Steel Raw Material Price Keep Soaring

The analysis believes that the increase in raw material prices is on the one hand affected by the global new crown pneumonia epidemic, and on the other hand is the expected catalysis of the global economic recovery after the new crown vaccine is launched in the future. In response to rising raw material prices, home appliances and other companies have announced price increases.

The steel market has entered a phased adjustment. We predict that the market outlook will still have upward momentum and will be adjusted slightly in the near future, waiting for the real demand to start.

Financial capital hoards raw materials and speculates on commodities in the futures market are the reasons for the recent rise in commodity prices. This trend will continue for at least two years, and the pressure of RMB devaluation will increase. The global economy has not recovered in an environment of sluggish demand in the real economy.

Post time: Mar-03-2021

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