In the past few days, the steel market is hotly discussing a word, that is, limit production. At the weekend, the news of production restrictions in the Tangshan steel market came out, and the price of the steel market rose in response, which should be said to be the largest daily increase after the sharp decline in steel prices since mid-March.

The ex-factory price of Tangshan billet rose by 110 yuan on the same day, but yesterday afternoon the ex-factory price of Tangshan billet was actively reduced by 30 yuan. Other steel varieties also rose by about 100 yuan to varying degrees. However, there is a phenomenon that deserves our attention, that is, although the price of steel has risen, the steel market volume has not kept up.

Yesterday, the domestic key steel market construction steel trading volume was only 160,000 tons, which also means that downstream users do not agree with the steel price increase in the past two days. Downstream users hold this attitude, that is, the current steel market demand is not good, the price rises, or will return to the same place.

Today, the spot price of steel in many places has begun to fall, and steel traders have also seen that if the price continues to rise, it will be more and more difficult to ship, so low price volume is their only choice.

Another strange thing is that after the news of Tangshan steel company production restrictions, the biggest increase was iron ore, the current price of imported iron ore has approached $108, this week the price of iron ore on the Dalian Commodity Exchange also rose by about 5%.

According to common sense, steel companies limiting production will reduce the use of iron ore, and iron ore prices will also be affected. However, the price of iron ore has risen significantly more than the price of finished steel products in recent times, it can be said that the speculative capital speculation component is very large, and the iron ore market is very deep.

This morning, the China Iron and Steel Association released domestic steel production and inventory data in late May, and in late May, the national daily output of crude steel was 2.7983 million tons, down 3.72% month-on-month, daily iron production was 2.3785 million tons, down 2.12% month-on-month, and daily output of steel was 3.7353 million tons, up 0.08% month-on-month. Steel production fell slightly, with no signs of a massive cut.

In late May, the steel inventory of key steel enterprises was 15.6207 million tons, down 643,900 tons or 3.96% from mid-May; It decreased by 2.4896 million tons or 13.75% from the same month last month. Judging from the inventory data, the decline is still relatively fast.

Only the production restrictions of non-Class A steel enterprises in Tangshan and Qinhuangdao can not shake the huge steel production. It is explained here that with the continuous optimization of environmental protection measures in steel mills, the number of non-A steel enterprises in Tangshan and even Hebei is already small.

Steel prices have fallen too much, and they have fallen long enough, and steel price speculation naturally follows. However, we have also seen that Qinhuangdao's production limit is only 5 days, which has little impact on steel production, and the hype limit is just a gimmick.

Therefore, the news of steel companies limiting production is only a reason for the market to raise the price of steel, and finally the steel market has to return to the essence of supply and demand, at the current price, the big rise will fall, and the big fall may not rise back.