The steel industry is in the low season of consumption, "protection" and "pressure" parallel policies have been implemented, steel output is gradually reduced, export tax rebates related policies have been adjusted.But consumption peak season demand growth can not be falsified, the market is concerned about the supply gap, contradictions interwoven steel market prices show a wide shock situation.Market analysis, "production cut" or concentrated in the fourth quarter of the landing, strictly prohibited "one size fits all" policy tone to make the enterprise can flexibly adjust production and sales strategy according to the policy, in the short term and did not appear in short supply phenomenon, peak season "guarantee" pressure or not.

Find steel network industry big data research institute analyst Macon pointed out that in August provinces and cities did not release the deployment of crude steel production related documents, from January to July issued related documents, provinces and cities to reduce the deployment of crude steel production focus on.Some provinces and cities are not for the steel production limit details, but the demand for crude steel output last year does not increase;Some provinces and cities require crude steel production year-on-year does not increase, focus on reducing the level of environmental performance is poor, high energy consumption, the level of relatively backward production process equipment;Some provinces and cities to complete the national reduction of crude steel output tasks to ensure the realization of this year's development goals.

The East China Sea futures ferrous metal chief researcher Liu Huifeng said, crude steel production policy in the second half of the year or in the fourth quarter - the consumption of the low season, to effectively take into account the reduction of output and stable prices of two aspects.According to the policy tone of "one size fits all" which is strictly prohibited to reduce steel output, enterprises should be able to adjust themselves, so it is expected that most enterprises will choose to increase maintenance efforts in the off-season.

High-frequency data for July and August suggest that supply has started to fall month-on-month.According to the latest national data, in July, China's crude steel output of 86.79 million tons, down 8.4% year on year;During the same period, the average daily output of crude steel in China was 2.799 million tons, down 10.5% from the previous month.In July, China produced 11.1 million tons of steel, down 6.6 percent year-on-year, while the average daily output of steel was 3.581 million tons, down 11 percent month-on-month.Crude steel production has hit a new low for the year.

At the same time, Liu huifeng believes that the strength of the policy is beyond doubt.Hebei's Winter Olympics plan called for a reduction of 21.171 million tons, while Shandong's previous plan called for a 4.3% reduction to 76.5 million tons."The strength of this policy should be beyond the expectations of the previous control."Liu huifeng said.

Compared with the rapid rise in the early steel market price, the recent production reduction expectations do not seem to have caused the sharp fluctuations in the steel market.Macon said production cuts in the steel industry go hand in hand with the goal of maintaining stable domestic supply and prices.Since this year, the country played a series of policy combinations, effectively reduce the cost of imports, expand steel resources (especially low-end products) imports, and support the domestic reduction of crude steel output (reduce low-end products export), guide the steel industry to reduce the total energy consumption, promote the transformation and upgrading of the steel industry and high-quality development.

"The implementation of the production reduction policy requires time to adjust and strike a proper balance.Such as high-end less reduction, low - end more reduction;More reduction of blast furnace, less reduction of electric furnace;Ore reduction, scrap less reduction;Off-season more reduction, less peak season;Low price low profit more reduction, high price high profit less reduction.Do not engage in extensive "one size fits all."'From a supply point of view, there's no short term shortage,' Mr. Macon said.

Macon said August was a weak month for consumption and there was no significant gap between supply and demand.Policy implementation period across the peak season, peak season whether there will be a gap between supply and demand can not be determined, but because the provinces and cities steel production enterprises can flexibly adjust production and sales strategy according to the policy, less peak season, more off season, the overall pressure is expected to be small, limited impact on the market.