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Devaluation of the RMB will drive the export of Electromechanical industry
13, the Chinese part of the small steel mills will be used in the construction of steel, such as export prices of $5 per ton -10 u.. This is seen as China's export sector, the industry's response to the devaluation of the renminbi. Since last year, China's steel export growth because of low prices to remain high. The industry believes that the devaluation of the renminbi will further expand the export price advantage, which is expected to increase in recent years, the continued decline in export growth.
Steel prices down export prices
13, the central bank once again cut the central parity of RMB against the U.S. dollar 700 basis points to 6.4010, which is the value of the third consecutive days after the devaluation of the RMB against the dollar Tuesday. Under the devaluation of the background, the export oriented industry is expected to be the representative of the textile and steel enterprises is expected to benefit.
In the past two years, the domestic iron and steel exports rebounded sharply. Customs data show that the first half of China's total exports of 52400000 tons of steel, an increase of 27.8%. And in recent years, the main reason for a large number of steel exports is that the price is cheap, in June this year, the price of steel has hit a new low since 2002, now the devaluation of the renminbi more drama this advantage.
Analysts believe that the devaluation of the RMB will promote domestic steel exports will promote the export of mechanical and electrical appliances, machinery, home appliances and other products, to improve the supply and demand situation in the domestic traditional industries play a positive role.
In addition to steel, a large number of dependent on exports of clothing and textile industry also benefit. In July of this year, China's textile and garment exports fell by 4.4%. Insiders said that after the devaluation, foreign currency purchasing power is relatively enhanced, the second half of foreign trade orders is expected to grow, and the business can also get the benefits of foreign exchange.
Yin Tongyue, chairman of China's largest automobile exporter, said the devaluation of the renminbi would be beneficial to the company's overseas sales. H shares of China Machinery Engineering rose 5.9% on Tuesday.
Cost of raw materials import
China is a large importer of raw materials, crude oil, copper, iron, aluminum, China will have to import a lot of. RMB against the U. S. dollar fell, so that the cost of Chinese imports increased.
Analysts believe that although the steel export will increase, but the dollar denominated iron ore, coal and other raw materials import costs will rise. Overall, the RMB devaluation to promote steel demand, steel prices are favorable; but the cost of steel enterprises operating may be unfavorable, because the cost may be greater than the product price increases."
Tao Jinfeng, deputy director of Institute of Guotai Junan Futures Research on the financial derivatives to the Shanghai newspaper said that "exchange rate fluctuations will transfer to other markets, first the precious metal, and then is colored, reactions at first, then the market follow the changes of."
Last week, in the impact of crude oil fell, the international commodity index CRB week decline of 0.18%, of which New York gold rose 1.6%, copper rose 0.28%.
However, Tao Jinfeng believes that the price of non-ferrous metals prices rose more than the impact of the financial markets, rather than the supply and demand of the industry itself. July of weak economic data, nonferrous bulk industry at present only weak rebound, is not sustainable, for reversing the import and export situation also finite.