The important logic behind the rise in steel prices is that China's economy is about to recover?

In the past two and a half months, the overall price of steel rose by more than 30%, while in the futures market, rebar, hot rolled coil, channel and other prices rose more than 40%. Steel prices have hit a new high since 2013, and have led to a marked rise in commodity prices for iron and steel, coke and coking coal, as well as steel related industries.

There are two real reasons for the steel price increase.

One reason is the continuation of the overcapacity policy on the macro scale. This round of macro-control, the presence of environmental pollution, backward technology, small and medium-sized, as well as traditional high energy consumption of iron and steel enterprises, carried out shutting down rectification. Even large steel groups should upgrade their outdated equipment.

Another reason is the steel traders and steel companies are starting to hoard goods demand. With the global economy and the general recovery of China's economy, the investment in various types of fixed assets has also increased significantly.