What Affects the Price of Steel?

Nov 28, 2017

 

what affects price of steels price

What is the steel used for? Steel is a main material for the industry and manufacturing industry. As the main material of the steel rail and joint bar, track bolts and nuts, fastening clip, others rail components, the price of the steel is much more important for railway fasteners manufacturers. For the majority of railway fasteners like rail clip, tie plate, these railway fasteners have strict requirements for the quality. So the steel quality should be guaranteed at first.

China as the main exporter in term of the high-quality steel, so many countries have the cooperative relationships with China. So the price of railroad steel rail made in china draws many countries attention. AGICO Rail as a railway components manufacturer from China, we have analyzed the main factors in term of the steel price.Recently, the price of the steel has increased to a degree, so we study the main reasons based on the supply-demand relationships.
 

two types steel price in china
 

According to the data, the price of the steel has increased obviously in term of the China market during this month. The hot rolling which the main material is Q235B and the price of this kind of steel has increased 10RMB already. For AGICO Rail, the Q235B is main material to manufacture the light rail. So our cost has risen from another perspective.

The H-bar is also main material for us to make railway components. The price of H-bar has raised, either. In term of Shanghai, the price of H-bar has raised almost 50RMB.
As a whole, the price of Chinese steel has raised sharply during this month. What causes that? What elements affect the price of the steel? Based on the real- time data, we would like to analyze the main factors.

Supply

Off-season effect

Winter is coming, so the north of China was turned on the collective heating. The collective heating will burn lots of fuel that will aggravate the pollution. And the hazy weather is a concern for Chinese people. The collective heating is no doubt that rubs salt into the wounds. So the Chinese government introduces a policy to control the pollution emission. Many factories like steel mill, electricity generating station have been limited production. In accordance with the level of pollution discharge performance, all factories abide by the peak-off production discontinuation program. Meanwhile, the steel production capacity cannot surpass the 50% of previous capacity. This policy greatly limits the production of steel. Along with the production of the steel has decreased, the price will no doubt be increased.

Raw material


q235 steel billet price
 

As we know, steel making needs a good deal of pig iron, iron ore, steel scrap and so on. We find that these raw materials price has also increased in various degrees. So the price of the raw material has increased that is the main factor to affect the price of the steel.

 Demand

Chinese market

Winter is not suitable for work. For the majority of the construction party, winter is much colder and it is not better to construct. The lower temperature will reduce the work efficiency. So the demand for the steel will reduce. Meanwhile, in order to respond to the Chinese government call, all of the steel factories begin to reduce their production of the steel so that the steel social stock has reducing gradually. A thing is valued if it is rare. The lower social stock will cause the higher price.
 

Global market

The demand of the overseas market influences the price of the price of the Chinese steel. The export volume will also have a big influence on the steel price in the domestic market. From another hand, China is both the world's largest producer and consumer of steel, so price fluctuations can hit the world's second-largest economy on all sides. Prices also stabilize when there are more steel exporters in various world regions.

Supply and demand, however, aren’t the same across the board. Whatever the global, regional, and local demand, all these areas may not have the peak and trough at the same time. One city may be having a building boom while another is sitting stagnant. Some regions of the world are just having a low-capacity time. Like the majority of Chinese steel producer are limited by the hazy weather in each winter. So it’s unlikely they will provide raw materials or use finished steel.
 
All in all, we have analyzed the main factors for the fluctuations in steel prices. And we promise that whatever the price is high or low, AGICO Rail will use the high-quality steel to manufacture our products. Our hot-sale product include types of railroad steel rail, rail joint bars, railroad nails, gb track bolts, rail clips, tie plate, etc. Whatever the steel rail or the railway fasteners, these railway components quality is related to the train safety. So set your minds at rest for our products quality. Of course, welcome to request the sample and price for our products! 
 

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