In the off-season at the end of the year, the price of steel does not fall. Recently, the price of billet and the price of third-grade rebar in Tangshan, Hebei Province reached 3,830 yuan and 4,210 yuan per ton respectively, up 40% and 35% respectively over the same period of last year, and increased by about 150% compared with the same period of 2015. According to the data of the commodity e-commerce platform Nishimoto Shinkansen, the steel price index reached 4,700 on November 28, a new high in six years, an increase of about 40% over the same period last year. Similar increases have occurred in billets and rebars. At present, it should belong to the off-season of steel production and sales. Take Hebei as an example. On November 1, 2017, Hebei Province Metallurgical Industry Association released the PMI of Hebei Province in October 2017, which was 45.4%, down 5.7 percentage points from the previous month. . The new orders index for October was 47.9%, down 2.0 percentage points from the previous month. The steel downstream industry was affected by environmental protection policies, and the decline in demand led to a decline in new orders. In the case of off-season demand, why does the price fluctuate? Steel analyst Li Qun pointed out that this is related to the current slowdown in production, and once the market has a wind, it will take the opportunity to adjust the price. The output is reduced, and the steel price is not weak in the off-season. According to the reporter, as the weather gets colder and the temperature decreases, the construction decreases, the demand for steel decreases, and the steel industry enters the off-season of the year. However, steel prices are not weak in the off-season. According to data from the Nishimoto Shinkansen, on November 28, the steel price index was 4,700, a six-year high. The billet price index was 3830, only slightly lower than the 3860 on November 15, and the overall price is still high. On November 27th, the price of third-grade rebar in Tangshan area was 4,310 yuan per ton, a significant increase from the level of 3,000 yuan per ton in the same period last year. In the same period, the price of billet in Tangshan area was 3,840 yuan per ton, which was also much higher than the level of 2,700 yuan in the same period last year. The emergence of such a price status is related to the current reduction in production. From the data, the recent Tangshan blast furnace operating rate is 56.82%, the building materials operating rate is 26.13%, the strip operating rate is only 67.9%, and the profile operating rate is 43.48%. This is not the same as the sharp increase in steel capacity utilization rate announced by the National Bureau of Statistics in the third quarter. The National Bureau of Statistics previously pointed out that in the third quarter, the capacity utilization rate of ferrous metal smelting and rolling processing industry (steel) was 76.7%, up 4.4 and 1.0 percentage points year-on-year and quarter-on-quarter respectively, continuing the six-quarter recovery trend since 2013. The highest level. Analyst Ma Li believes that the current implementation of steel production in the northern region, resulting in a decline in overall production, which led to price fluctuations, while profit growth is also better. According to the National Bureau of Statistics, the national steel output in October was 2.961 million tons, the lowest level since March, and the first time it was below 3 million tons, down about 6% from the same period last year. Customs data also showed that China exported 4.98 million tons of steel in October. The monthly export volume decreased by 160,000 tons (by the previous month), down by 3.11% from the previous month and down by 35.24%. Ma Zhongpu, a steel expert, believes that steel demand is in the off-season and demand is declining, but steel production is also slowing down, and downstream industries, including automobiles and home appliances, have not been reduced. “The demand for manufacturing in the downstream part of steel has not declined. When steel production slows down, the balance of supply and demand balance is still tilting towards the steel industry, which has caused steel prices to go up,” he said. According to a report issued by the China Federation of Iron and Steel Logistics Professional Committee, the PMI index of the steel industry in October was 52.3%, a slight decrease of 1.4 percentage points from the previous month. It fell for the second consecutive month, but it has been above 50% for six consecutive months. The expansion interval. The specific production index and the new order index declined slightly, and the new export order index rose significantly but remained below the contraction range of 50%. Looking at the Hebei area alone, Hebei's steel PMI index was 45.4% in October, down 5.7 percentage points from the previous month. The two consecutive declines of the index returned to the contraction zone, and the industry's economic downturn was more obvious. In the sub-indices, the output index and the raw material purchase price index fell sharply to the contraction range. The new orders index and the finished product inventory index fell slightly in the contraction range, and the new export order index increased but remained in the contraction range. De-capacity to promote industry profitability In the case that steel prices are still rising, and heating production is expected, what is the capacity to go next year? According to the 21st Century Business Herald reporter, the state plans to remove 1-150 million tons of steel production capacity in 3-5 years. In fact, more than 60 million tons were removed in 2016. The target for 2017 is 50 million tons, which is currently overfulfilled. According to this, the amount of backward production capacity is limited in 2018. The completion of the above capacity-removal tasks does not include the production capacity of approximately 60 million tons to 100 million tons of strip steel removed before the end of June this year. Steel analyst Li Qun believes that with the increase in steel production capacity in the past few years, the amount of capacity to be depleted by 2018 is small, but the difficulty is even greater. "Steel has a futures market like rebar. The change in futures has a great impact on the spot price, but the price will not rise suddenly. It must be an orderly rise. After that, it will reach a high level, and the market will continue with the high. Callback," she said. Ma Zhongpu pointed out that the pressure on excess capacity of China's steel industry has weakened, and the elimination of excess capacity has achieved phased results, and the steel industry is in a profitable state. Wang Dayong, secretary-general of the Hebei Metallurgical Industry Association, believes that the limited production of steel in the heating season in Hebei's steel-producing city in October was implemented ahead of schedule, and steel prices fluctuated at a high level. The demand for raw materials market is expected to be weak, and prices are divided. Among them, coke prices have plummeted, billet prices have skyrocketed, overall costs have fallen, and the benefits of steel companies continue to improve. In November, the comprehensive implementation of environmental protection and production restrictions in the heating season in North China will make the supply of Hebei steel market more restrained, and steel prices will continue to fluctuate.

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