SMM forecast: it is estimated that the ex-factory price of rebar in Shagang will be reduced by 30 to 50 in late June, that is, the third grade big screw (4020 to 4040) is adjusted, the Kuti cost in East China is 3970 to 3990, and the plant cost is 3920 to 3940.
Fundamental analysis:
Supply side:
(1) supply of steel mills: according to SMM research, the screw thread production of Shagang in June was 454000 tons, an increase of 11000 tons over May, and the steel plant was still in a state of full production and even slightly increased. At the same time, the current Shagang building materials inventory of 250000 tons, in the normal level, steel mills do not have much shipping pressure.
(2) Market supply: although the EAF steel mills in East China have fallen into the edge of profit and loss or even lost money under the sharp compression of profits, some steel mills have feedback to reduce production, but due to the limited output of EAF steel mills, part of the reduction in production has a relatively limited impact on the supply side of the market.
Demand: although the current demand for building materials toughness, Hangzhou market as an example, as of today, Hangzhou inventory of 425000 tons (according to SMM statistics, as of 6.10 Hangzhou inventory 441000 tons), is still on the way down the warehouse, but as East China officially entered the Meiyu season, demand is affected by seasonal interference.
Generally speaking, there is no significant improvement in the fundamentals of building materials at this stage, and according to SMM research, the current market view of the future price is on the empty side. Therefore, on the one hand, under the double pressure of strong cost and weak steel price in the near future, the profits of steel mills are compressed, and on the other hand, as traders have been hanging upside down for nearly two months in a row, steel mills or small price cuts to cater to the market mentality and appease the mood of traders.
Compensation: according to research, as of June 19, Hangzhou Shagang resources quoted price of 3900 yuan / ton, businesses feedback actual loss of 100 yuan / ton or so. According to SMM steel data, the average selling price of Shagang resources in Hangzhou this day is 3960 yuan / ton, the loss per ton of steel is 60 yuan, and the steel mill is expected to make up 50 yuan / ton.
Cost: according to the SMM iron and steel data model, calculated by 108.9 US gold mine, the thread cost of long process steel plant is 3632 (excluding financial cost), and the thread profit is 218 yuan / ton.
Delivery ratio: Yonggang in late June thread 8.5% discount (30% discount for the previous period), 40% discount for wire disk (9.5% discount for the previous period).
