On the evening of November 24th, "CCTV Financial Review" invited Lixinchuang Guoliyan, Dean of the Metallurgical Industry Planning Institute, and Li Guoxian, a researcher of the China Hongguan Economic Research Institute, to visit the studio for in-depth analysis.

Steel prices keep falling. Who's pushing?
Lixinchuang, Director of Metallurgical Industry Planning Institute: Unoptimistic market expectations are the main reason for the decline in steel prices. The first is the increasing downward pressure on economic growth, especially for steel-related investment, such as the slowdown in real estate investment, and the similar situation for automobiles. Second, the price of steel is at a high level. Enterprises are trying their best to expand production in pursuit of better profits. There are also some production capacity replacement projects and transformation projects that have been put into operation. They have also further expanded supply and the market has exceeded demand. Third, trade frictions also have a direct or indirect impact on market expectations. This is the three most important factors that have led to price declines this year.
Guoliyan, a researcher at the China macro economic research institute: the pressure has shifted from downstream to midstream to upstream transmission of steel stocks. According to data from the electronic trading platform for steel trading, the decline in trading data in November was more pronounced, and the inventory of major steel companies has declined. At the same time, social stocks have dropped faster, which means that the pressure is transmitting upstream from downstream. Social inventory, that is, traders do not want to buy goods, corresponding to the upstream steel plant inventory surge, which led to lower prices.
Lixinchuang, Director of Metallurgical Industry Planning Institute: Steel prices have room for decline but there is also demand support. First, steel prices have room for decline at present, but I do not think it will fall significantly. The entire Chinese economy will still develop steadily, so the demand for steel will still be high; Second, if steel prices were too low in previous years, the high prices since this year will have to be returned to some extent, but steel is a capital-intensive and technology-intensive industry, and both production and research and development require a lot of investment. Therefore, the healthy development of the industry needs to have reasonable profit support, which is also an internal support.