SMM11 13: after four consecutive months of decline, the auto market production and sales data in the first 10 months of this year for the first time year-on-year negative growth. China's auto production fell 10.1 per cent from a year earlier to 2.33 million vehicles, while sales fell 11.7 per cent to 2.38 million vehicles, the China Association of Automobile Manufacturers said on Friday. Sales fell for the fourth month in a row from a year earlier. From January to October this year, car production and sales were 22.826 million and 22.871 million respectively, down 0.4 per cent and 0.1 per cent respectively compared with the same period last year. The CAAC said production and sales growth continued to slow from January to October, the first negative growth so far this year.
Recently, many vehicle listed companies disclosed production and sales data in October, most of which car sales fell in October compared with the same period last year. This pressure has also been transmitted to upstream parts and downstream dealers. According to the three quarterly reports disclosed by 130 A-share and B-share auto parts listed companies, a total of 32 companies had a year-on-year decline in operating income in the first three quarters, of which 46 had a year-on-year decline in revenue in the third quarter.
According to SMM's research on the upstream processing market, due to the poor production and marketing of cars, there has been a shortage of orders for downstream die casting, tires and other enterprises, as follows:
Recycled aluminum: more bidding for orders
Local recycled aluminum enterprises generally feedback that the order quantity is insufficient, there are more competitive bidding orders, and the market price is chaotic.
Demand for aluminium for cars is still hard to shake up for real estate:
1. Real estate is still a big consumer of aluminum.
From the real estate data and aluminum consumption of the link, we can still prove the advance of short-term housing sales. Such a delay in consumption also suggests that aluminum consumption will be low for nearly a year in the future compared with the same period last year.
But from the perspective of the future housing data, not only 2018, 2019 is also the big year of delivery; the centralized delivery of short-term housing will lead to an increase in demand for aluminum, but the inflection point of the data has not yet been seen.
2. Aluminum demand for cars drives weakness
Taking the United States as an example, we can find that there is a sequential relationship between the top of the shape curve of different resource products, aluminum earlier than copper earlier than energy, and aluminum has a double peak phenomenon, the second peak and copper are close to lag slightly behind copper. The theoretical explanation is that the first peak of aluminum is the peak of demand for direct use (real estate), and the second peak is the peak of alternative demand (transportation, packaging) (aluminum instead of steel, aluminum instead of copper).
Combined with the judgment in the copper report, the bright spot of aluminum demand in the future comes from consumer and alternative demand. But from now on, the consumption of cars is not particularly beneficial to the drive of aluminum consumption.
Poor car sales have a certain drag on the operating rate of zinc oxide enterprises:
In the zinc oxide terminal plate, the rubber tire plate accounts for the main part of zinc oxide consumption, accounting for about 50%. Automobile production and marketing data is not good, from the trend of zinc oxide enterprise start-up rate, zinc oxide enterprise start-up rate has a certain drag. According to SMM research, the average operating rate of zinc oxide from January to September is 52.3%, down 5.5% from the same period last year. Zinc oxide enterprises as a whole are not optimistic this year. The weakness of automobile production and sales is also one of the important factors that drag down the orders of zinc oxide enterprises. For tire enterprises and zinc oxide order impact follow-up sustainable attention to tire order data.
Steel: hot rolling fundamentals are not optimistic the decline in car sales is even worse
According to the latest survey of SMM Iron and Steel, the total planned output of hot rolling sample mainstream steel mills in November is 8.8563 million tons, which is + 2% compared with the actual output in October, and the planned export volume is 665000 tons,-2.2% month-on-month. The domestic investment volume is 819.13, and the month-to-month ratio is + 1.9%. This is mainly due to the relaxation of the production restriction policy during the heating season and the continued contraction of exports. On the whole, the high level of hot rolling supply rose in November, which put a lot of pressure on the price of hot rolling in the later period.
Demand side: end demand barely sustained a sharp decline in speculative demand in November. From the auto industry production and sales data to value card sales of 80,000 vehicles month-on-month increase of 3%, the cumulative decline of 9%.
1) in October, the production and sales of heavy goods vehicles were 72500 and 80100, up 0.49% and 2.99% from the previous month, and down 24.09% and 13.25% from the same period last year. From January to October, heavy goods vehicles produced and sold 923700 and 976000 vehicles, down 3.47 percent from a year earlier and up 1.31 percent from a year earlier.
2) in October, the production and sales of large passenger cars were 5400 and 5000, down 27.33% and 29.10% from the previous month, and 40.20% and 46.41% from the same period last year. From January to October, large passenger cars produced and sold 58100 and 56100 vehicles, down 7.44 per cent and 9.13 per cent from the same period last year.
Copper: support below the high probability test for upward conduction of copper prices due to weak terminal consumption
In terms of copper processing, the weak orders represented by cars and household appliances in the downstream began to conduct gradually upward. In October, the opening rate of SMM copper rod enterprises fell 3.7 percent from a month earlier, and copper tubes and strips also showed a relatively obvious decline in October compared with the previous month. The opening rate of copper processing enterprises points to the weakness of consumption. And the physical processing enterprises for the future expectations are not optimistic, it is difficult to see a recovery this year, November copper rod is expected to continue to decline from the previous month. In the middle of the fourth quarter, SMM maintained a weak judgment on the terminal consumption before the first quarter of 2019, the consumption decline at the bottom is bound to be transmitted upward, and the new production energy represented by Jincheng Metallurgy on the supply side will also be released gradually. The slowdown in consumption corresponds to the expansion of production capacity, the large probability of electrical copper inventory will be on the rise, the fundamentals are obviously under pressure. The effect of the policy backing has not been seen for a long time, and the external environment has hardly been improved. standing at the current time, we have not yet seen a logical shift in the upward trend of copper prices, and there is a good chance that we will continue to test the underlying support.
Stainless steel: demand weakens and production is still climbing slightly
Demand for stainless steel weakens in November-December, but stainless steel production is still climbing slightly, so stainless steel prices will show a downward trend from the following month to the end of the year.
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