Why the Price of Steel keeps Increasing
Data show that the price indices of steel in China increase more than 40% on the year-on-year basis, and the price of steel increased by more than 2.5% in last week. So why the price of steel keeps increasing?
The price of iron ore keeps increasing. According to data released by the National Bureau of Statistics, compared with the first quarter in 2020, the unit price of iron ore is increased by 66.45% in 2021.
The demand for steel is increasing. The demand for steel in the downstream industries such as construction, automobile, machinery and home appliances in increasing, and the practical steel consumption of the main steel consumption industries increased by 47%, wherein the increase in the construction is 49%.
Besides these two reasons, the government has released the double control over the volume and the capacity for the carbon neutralization policy, which reduces the steel production and causes the increase of the steel price.
Comprehensively, the demand for steel is increasing, and the price of steel in the second to fourth quarters is expected to be increasing.
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