[review this week]: the trend of the hot roll period is now separated, and the late basis is expected to converge.

Futures: as of Friday, the settlement price of hot rolls was 3682 yuan / ton, up 9 yuan / ton from 3673 yuan / ton on Friday. At the beginning of the week, the volume weakened under the pressure of escalating trade disputes between China and the United States and imposing tariffs on each other. In the later period, the market mentality improved with the boost of the Ministry of Commerce and macro data, superimposed by the strong strength of iron ore, and the volume followed the rise. (the Ministry of Commerce said on the 10th that the impact of tariff measures on China's economy is fully controllable. China has issued a series of "six stability" measures and achieved considerable results. In addition, macroeconomic data for April show that short-term fluctuations do not change the overall trend of stabilization.)

Spot: the national average price of hot roll this week is 3992 yuan / ton, down 41 yuan / ton compared with 4033 yuan / ton. The basic surface of the hot coil is at the bottom of the black plate (iron ore > coke > thread > hot coil), and the contradiction between supply and demand is the most prominent. Supply continues to grow by 10% with the stimulus of production profits and no profit or even loss in back-end cold production, while demand is mostly disrupted by the Sino-US trade war and dragged down by domestic downstream demand such as cars and household appliances. Weak. In this case, the strength of the raw material side of the hot roll boost is more limited, the overall weakening pattern has not changed, the price is expected to be strong next week or weak.

According to the National Bureau of Statistics, in April 2019, the production of crude steel, pig iron and steel in industrial enterprises above the national scale accelerated, and the average daily output of steel reached a new high. (in April 2019, the national crude steel output was 85.03 million tons, an increase of 12.7 percent over the same period last year, and 5.9 percent over the previous month.) in April, the national pig iron output was 69.83 million tons, an increase of 10.1 percent over the same period last year, and 5.6 percent over the previous month. In April, the national steel output was 102.05 million tons. It was up 11.5% from a year earlier and 4.3% from a month earlier. From January to April, steel production totaled 370.86 million tons, an increase of 11.1 per cent over the same period last year.

With the end of the heating season, steel mills have resumed production, steel mills in May "maintenance tide" basically ended, coupled with production profits continue to rise, steel mills production enthusiasm is high. Although Tangshan enters the region to limit production (steel mills account for 80% of Tangshan's production capacity), feedback from many steel mills still mainly affects sintering machines, and the production limit on the reverse side of the blast furnace has not been actually tightened for the time being, although it does not rule out the possibility of strictness in the later stage. However, at present, it is still in accordance with the original plan of "non-stop" production, so the supply of hot rolls continued to show an increase in May.

2. Demand side: the demand downstream of the hot roll is weak.

Real estate: April real estate sales and investment data are still bright. From January to April, China's real estate development investment increased by + 11.9% compared with the same period last year, and the area newly started increased by 13.1%. China's urban commercial housing sales prices rose slightly in April: in April, sales prices of new commercial housing in first-tier cities rose 0.6 percent from the previous month, an increase of 0.4 percentage points over the previous month. Sales prices of new commercial housing in second-tier cities rose 0.8 percent from the previous month, 0.2 percentage points higher than the previous month. Sales prices of new commercial housing in third-tier cities rose 0.5% month-on-month, down 0.2% from the previous month.

Infrastructure: infrastructure investment was stable in April and is expected to continue in May.

Manufacturing: the manufacturing sector grew at a quarter-on-month rate of-3.1% in April, showing an ultra-seasonal slowdown. Trade friction between China and the United States suppresses export orders.

Shipbuilding: from January to April, 13.25 million deadweight tons were completed, an increase of 13.3 per cent over the same period last year. Orders for new ships were 9.49 million deadweight tons, down 47.3 per cent from a year earlier. At the end of April, orders for hand-held ships were 85.55 million deadweight tons, down 8 per cent from a year earlier and 4.2 per cent lower than at the end of 2018.

Home appliances: home appliances to the countryside policy has a boost, China's home appliance production in April year-on-year growth trend. Among them, the output of air conditioning in April was 23.636 million, an increase of 15.4% over the same period last year, the output of washing machines in April was 6.468 million, an increase of 9.4% over the same period last year, and the output of color TV sets in April was 16.886 million, an increase of 5.7% over the same period last year. The production of refrigerators was 7.712 million in April, an increase of 2.1 percent over the same period last year. Between January and April, the cumulative output of refrigerators was 26.15 million, an increase of 4.1 per cent over the same period last year.

Automobile: the added value of the automobile industry fell 1.1% in April compared with the same period last year, and 0.3% from January to April. The total retail sales of automobile goods fell 2.1% in April from the same period last year, and 3.1% from January to April. Investment in the auto industry fell 1.4% in April from a year earlier.

[inventory]

On the treasury side: this week, the country's total hot coil inventory of 3.0111 million tons, compared with last week-1.1%, a year-on-year decline of-3.5%.

[macro and policy aspects]

1. Ministry of Commerce: the impact of tariff measures on China's economy is completely controllable

On May 10, the United States officially announced that the tariff rate on US $200 billion worth of goods imported from China would be raised to 10 per cent. In order to safeguard our national interests and resolutely oppose unfair trade practices of the United States, The tariff Commission of the State Council of the people's Republic of China has adopted a resolution to increase the tariff rate on some of the US $60 billion list of US goods that have been subject to tariffs since 0: 00 on June 1, 2019. A tariff of 25%, 20% or 10% will be imposed, respectively. At the same time, the Ministry of Commerce said that the impact of tariff measures on China's economy is fully controllable, and China has introduced a series of "six stability" measures, which have achieved considerable results.

2. National Bureau of Statistics: China's economy remains stable and advancing in April

The National Bureau of Statistics released a number of data on the 15th and said: China's economy continued its overall steady and steady development trend in April, but the external environment is still complex, and the problem of unbalanced and inadequate domestic development in China is still prominent. The foundation of sustained and healthy economic development still needs to be consolidated

3. National Bureau of Statistics: China's steel output increased by 11.5% in April

According to the National Bureau of Statistics, in April 2019, the production of crude steel, pig iron and steel in industrial enterprises above the national scale accelerated, and the average daily output of steel reached a new high. In April 2019, the national crude steel output was 85.03 million tons, an increase of 12.7 percent over the same period last year, and 5.9 percent over the previous month. In April, the national pig iron output was 69.83 million tons, an increase of 10.1 percent over the same period last year, and 5.6 percent over the previous month. In April, the national steel output was 102.05 million tons. It was up 11.5% from a year earlier and 4.3% from a month earlier. From January to April, steel production totaled 370.86 million tons, an increase of 11.1 per cent over the same period last year.

4. The United States delays its decision on automobile tariffs

It is reported that the White House will postpone the decision on car tariffs for up to six months. Boosted by the news, US and European stocks reversed in intraday trading, with US and European auto stocks rising, Daimler up 3 per cent and BMW up 4.7 per cent.

5. In the first quarter, the new debt limit of more than one trillion provinces was lowered.

In the context of steady growth, the Ministry of Finance has accelerated the issuance of special bonds for infrastructure projects. As of the first quarter, the issuance of local bonds had reached 1.41 trillion yuan, of which 1.18 trillion yuan was new bonds. That represents 85.2 per cent of the local government debt limit of 1.39 trillion yuan issued ahead of schedule this year.

[summary of major events]

1. The Sino-US trade talks continued, and the Chinese side said: cooperation is the only right choice for both sides.

At the end of the 11th round of high-level Sino-US economic and trade consultations on 10 May, Liu he said: cooperation is the only correct choice for both sides, and China will never give in on major issues of principle, and firmly opposes the increase of tariffs by the US side.

2. The Department of Housing and Urban-Rural Construction of Hunan Province issued the Circular on the further Development of Special Control actions for Construction Safety

On May 15, the Housing and Urban and Rural Construction Department of Hunan Province issued the Circular on further carrying out Special Control actions for Construction Safety. It is required that the competent departments in charge of urban and rural housing construction at all levels fully understand the significance of in-depth special management actions for construction safety, and sum up experience in a timely manner on the basis of their work in 2018. To mobilize and redeploy the special management action of construction safety, refine the division of tasks, compaction responsibility layer by layer, and ensure that all the work is promoted in a strong and orderly manner. All cities and prefectures should strengthen the guidance and coordination of the competent departments in charge of urban and rural housing construction in the counties (cities and districts) under their jurisdiction, and supervise the implementation of all kinds of work. And by December 31, 2019, the summary report of the special management action for construction safety in various cities and prefectures will be reported to the Building Management Office.

3. According to various data, the car market is mired in a "cold winter".

Car sales in China between January and April were-12.1% year-on-year, and car sales in China in April were-14.6% year-on-year, according to figures released by the China Automobile Association. China sold 1.58 million passenger cars in April and fell 17.7 per cent in April from a year earlier. In addition, passenger federation data show that: in April, general passenger car sales were 1.54 million, down 16.6% from a year earlier, the 11th consecutive month of year-on-year decline. Retail sales of passenger cars in the first week of May reached a low level of 33500 units a day, down 24 percent from the first week of May 18, and wholesale of passenger car manufacturers in the first week of May was only a low level of 26000 units a day. It was down 44 per cent from the first week of May 18.

4. Tangshan City officially issued the "enhanced Control Plan for the Prevention and Control of Air pollution in May"

In order to further promote the deep treatment of the enterprise environment, control and reduce the total amount of pollutants emitted, combined with the conditions of atmospheric diffusion in May, Tangshan officially issued the "enhanced Control Plan for the Prevention and Control of Air pollution in May". Fight a good battle for the blue sky. The "plan" requires that enterprises should grasp the key links of emission reduction and speed up the promotion of environmental protection governance in key industries. Before the end of May, the iron and steel, coking, cement industry completed raw material storage, transport, dust removal and other unorganized emission control, as well as plant greening, hardening work; The desulphurization project of blast furnace gas and coke oven gas, the transformation of ultra-low emission of cement kiln and the construction of point dedusting project have been started. The thermal power industry has completed the transformation project of ultra-clean emissions. The construction of the ultra-low emission renovation project for the flat glass industry has been started. 50% of the retrofit of coal-fired boilers and 20% of the denitrification of gas-fired boilers have been completed. Industrial furnaces and VOCs-related enterprises have been carried out in an all-round way.

5. Hebei: gradually reduce the number of iron and steel enterprises in various parts of the country, and strictly prohibit the addition of new production capacity

The Hebei Ministry of Industry and Information Technology recently announced the relevant situation of standardizing the dynamic management of enterprises in the iron and steel industry in 2018, in order to continue to implement the Standard conditions for the Iron and Steel Industry (revised in 2015), strictly check the application of new and standardized enterprises. At the same time, it is said that, in principle, the number of standardized iron and steel enterprises in various localities should be gradually reduced, and all enterprises that do not meet the requirements will not be included in the first examination and reporting list of standard announcement enterprises. Enterprises that discover and verify the existence of new iron and steel production capacity in violation of regulations, illegal production of "ground strip steel" and other illegal production shall promptly apply for cancellation to the Ministry of Industry and Information Technology.

At noon on May 16, a plant collapsed in Changning District of Shanghai, killing 10 people so far. After preliminary investigation, the main cause of the accident was the illegal construction of the project construction unit without examination and approval. In order to avoid a "repeat" of the accident, Shanghai issued an emergency notice for a comprehensive investigation of decoration and decoration projects and other ongoing construction projects that did not apply for construction permission. Focus on the examination and approval of project documents, audit procedures, qualification and qualification of participating parties, as well as existing construction structure quality and safety risk identification, evaluation of related documents, including construction procedures.