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[SMM Thread Analysis] the contradiction between supply and demand has been alleviated slightly, and the steel price "Liu dark" for a long time or welcome "Hua Ming another village"
Jun 21,2019 18:59CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

Thread week carding: [the contradiction between supply and demand has been alleviated slightly, the steel price "Liu dark" for a long time or welcome "Hua Ming and a village"]

 

[review and Prospect]:

Futures: this week's snail trend is weak, as of today snail 1910 contract settlement price 3816, compared with Friday 3785 yuan / ton, up 31 yuan / ton.

Spot: the national average price of thread today fell 49 to 3935.4 yuan / ton from 3984.4 yuan / ton last Friday. The average weekly price fell 68.56 yuan per ton, compared with an average price of 3930 yuan per ton this week.

The current trend separation situation has not changed this week, mainly because there is good news again this week-friendly phone calls between Chinese and US heads of state, driving black futures to float red across the board, and late-stage snails also continuing to rise under the strong support of the raw materials. However, on the spot side, the precipitation in the south, especially along the Yangtze River, has been constant this week, and the release of demand has been suppressed, although the market sentiment has been boosted in the latter half of the week. However, the fundamentals are still difficult to support spot prices to catch up with the pace of the snail, as a whole, still continue to decline.

However, on the one hand, according to SMM research, some regional electric arc furnace steel mills have reduced or even stopped production this week, in the case of no significant improvement in the profit and loss situation, the production area may continue to spread next week; and although demand is still subject to seasonal interference, it is still supported by the vigorous development of infrastructure, and businesses feedback that the shipping situation has improved this week, and the contradiction between supply and demand has been alleviated to a certain extent. On the other hand, due to the profit of steel mills (the cumulative price reduction of 280 yuan per ton in the middle and late June of Shagang), traders have stepped out of the inverted "quagmire" and their mentality has improved. Coupled with the recent frequent news of environmental protection and production restrictions (Tangshan production restrictions, Luliang issued the "notice on the implementation of wrong peak production and production restrictions for some enterprises around the urban area," Wu'an City issued the "Emergency notice on the implementation of enhanced Emergency Control measures in key areas"), the scope of subsequent production restrictions and relaxation are still a major variable, but the market has already had high supply expectations, so on the whole, spot prices may have a strong shock next week. Ushered in a turn, but there was another village.

 

[fundamentals]

According to SMM statistics, as of June 20, according to the maintenance news announced by various building materials steel mills, the impact of building materials maintenance in July was 1.53 million tons, 2.3423 million tons less than that of 3.8723 million tons in June, but as the price on the raw material side remained "easy to rise but not fall," steel prices have fallen for more than one month in a row, and steel mill profits have been continuously compressed (according to the SMM data model, as of June 21, According to the calculation of 114.3 yuan / ton American gold mine, the thread profit of long flow large plant has been compressed from the high point of 926.3 yuan / ton to 211yuan / ton). In this case, the subsequent steel mills may begin to repair. At the same time, since this week, EAF steel plants began to fall into losses, according to SMM research, some areas (such as East China, South China) EAF steel mills have been varying degrees of production reduction. Overall, the current thread production has fallen slightly, follow-up steel plant maintenance and environmental protection production restrictions SMM will continue to follow up the report.

2. Demand side: the support of rigid demand is still there, and the amount of local bond issuance and fixed investment in infrastructure has increased steadily.

Relevant data show that since the beginning of this week, the size of local bond issuance this week has been locked in at 311.222 billion yuan, the second highest level so far this year. In June, the amount of local bond issuance has exceeded 600 billion, and the monthly issuance scale is likely to reach the highest level so far this year. The infrastructure industry has received another strong boost under this situation. According to the Ministry of Transportation, from January to May 2019, China's railway fixed assets investment totaled 224.417 billion yuan, an increase of 12.6 percent over the same period last year. Fixed assets investment in highway and waterway transportation has reached 753.73 billion yuan, an increase of 4.8 percent over the same period last year. The development of the infrastructure industry will form a strong support for the demand for building materials.

[inventory]

Some cities are still affected by the rainy season this week, but demand is still there, and with the continuous rise of iron ore and the good news, the transaction situation has improved to a certain extent compared with last week. On the whole, the social treasury has risen this week, but the growth rate is slower than last week. The contradiction between supply and demand as a whole has been alleviated to a certain extent, and the growth of factory social database has not brought pessimism.

On the treasury side: this week, the total treasury was 7.9025 million tons, up 105900 tons from last week, up 1.4 percent from the previous week, and 1.0997 million tons from last year, up 16.2 percent from the same period last year. In terms of social inventories: this week's social inventory was 5.578 million tons, up 57400 tons from last week, up 1 percent from the previous week, and 803700 tons from last year, up 16.8 percent from the same period last year. In terms of inventories: this week, the warehouse was 2.3245 million tons, an increase of 48500 tons over the previous week, an increase of 2.1 percent over the previous week, and an increase of 296000 tons over last year, an increase of 14.6 percent over the same period last year.

 

[macro and policy aspects]

1. A new round of 300 billion fee reduction is just around the corner.

Starting from July 1, a package of fee reduction measures, including reducing administrative unit fees, is expected to reduce the burden on enterprises and the masses by more than 300 billion yuan for the whole year. This round of new fee reduction measures include reducing the registration fees for real estate ownership of garages and parking spaces from 550 yuan to 80 yuan per unit, and halving the collection standards of the National Fund for the Construction of Major Water Conservancy projects and the Civil Aviation Development Fund. reduce the average electricity price for general industry and commerce, lower the freight rate for floating railway cargo, reduce port charges, and so on. In terms of electricity price reduction, so far, the National Development and Reform Commission has issued two batches of measures to reduce electricity prices for general industry and commerce, the first batch of which will be implemented on April 1, and the second batch of four measures will be formally implemented on July 1. After the implementation of the two batches of price reduction measures, the target of reducing the electricity price of general industry and commerce by 10% as set out in this year's government work report can be achieved. The beneficiary industries that benefit from the reduction of electricity prices are mainly traditional high-energy-consuming enterprises. Considering the high energy intensity of electric power, most of them are heavy industrial sectors, and their products are mainly used for capital formation. As a result, lower electricity prices are generally good for stimulating investment.

two。 Major policy support for manufacturing investment

Meng Wei, a spokesman for the National Development and Reform Commission, said a few days ago that it will promote the sustained and healthy development of the manufacturing industry. In supporting the investment in the manufacturing industry, specific measures include speeding up the construction of major scientific and technological infrastructure, building the birthplace of strategic emerging industries, cultivating world-class advanced manufacturing clusters, implementing fiscal, taxation and financial policies, deepening the reform of the stock issuance system, and perfecting the relevant institutional arrangements for Science and Technology Innovation Board. It is necessary to create an environment for fair competition in terms of market access, examination and approval, bidding and bidding, further deepen the reform of "release management and service" in the field of investment, and promote the reform of the commitment system for investment projects. Many places are targeting high-end manufacturing to accelerate policy and investment deployment. For example, Guangdong plans to increase the added value of the equipment manufacturing industry on the west bank of the Pearl River by 6.5% and investment by 7.5% in 2019, and to introduce 270 new equipment manufacturing projects with an investment of more than 100 million yuan. Hubei strives to invest more than 10 trillion yuan in advanced manufacturing reserve projects in the province within five years.

3. National Development and Reform Commission: the bright spots of China's economic development are full of resilience.

The National Development and Reform Commission held a press conference to analyze and interpret the economic data of the current economic operation in May. Meng Wei, spokesman for the National Development and Reform Commission, said: in order to optimize the consumption environment, the next step of the NDRC will mainly promote two major tasks: one is to guide local governments to remove institutional barriers to restricting consumption, including strictly prohibiting local governments from issuing new car purchase restrictions. Local governments that have implemented car purchase restrictions should speed up the shift from restricted purchases to guided use according to the effectiveness of urban traffic congestion, pollution control, and traffic demand control. Second, improve the hardware and software infrastructure of household consumption, so that consumers can facilitate consumption and rest assured that consumption. In the manufacturing sector, the next step will be to implement fiscal, taxation and financial policies. The policy of reducing VAT tax rate and industrial electricity price will benefit manufacturing enterprises and implement the policy of reducing social insurance rates.

 

[summary of major events]

1. Tianjin Environment Bureau reported that 5 iron and steel companies are suspected of environmental violations.

Tianjin Environmental Administrative Law Enforcement team conducted surprise night checks on some iron and steel enterprises and found that five enterprises were suspected of environmental violations. They are: Tianjin Metallurgical Group Rolling three Iron and Steel Co., Ltd., Tianjin Tianfeng Iron and Steel Co., Ltd., Tianjin Steel Pipe Iron and Steel Co., Ltd., Tianjin Tianzhong Jiangtian heavy Industry Co., Ltd and Tianjin Iron and Steel Group Co., Ltd.

2. The inventory of the new house will go to disaster! Inventory soared 60% in Beijing compared with the same period last year

On June 19, Shanghai Yiju Real Estate Research Institute released the inventory report of 100 cities in China in May. According to the data, by the end of May 2019, the total inventory of new commercial housing in 100 cities monitored by Yi Ju Research Institute was 450.05 million square meters, down 0.5 percent from the previous month and 5.4 per cent higher than the same period last year. Of these, Beijing's inventory is about 9.27 million square meters, up 60 per cent from a year earlier. Specifically, the total inventory of new commercial housing in the first, second and third and fourth lines was 2805, 22131 and 200.69 million square meters, respectively, with month-on-month growth rates of-2.5,-0.1 and-0.6 per cent, respectively, and year-on-year growth rates of 33.6, 0.3 and 8.2 per cent, respectively.

3. 618 detonating the sale of household appliances, carnival and energy-saving products are expected to increase the intensity of benefiting the people.

Starting from 0: 00 on June 18, SUNING air conditioning full-channel sales broke 100 million in 8 seconds, Tmall platform small household appliances sales broke 100 million in 1 minute, JD.com household appliances 2 minutes and 36 seconds overall turnover broke the 1 billion mark. Some analysts believe that the hot consumption of 618 household appliances is only a microcosm of the potential release of the consumer market. According to the calculation of the National Development and Reform Commission, with reference to the last round of subsidy policy of "energy-saving products benefiting the people," if we popularize energy-saving subsidies throughout the country, it is estimated that between 2019 and 2021, we will be able to increase the sales of 150 million high-efficiency and energy-saving smart home appliances and boost consumption by about 700 billion yuan. Recently, the NDRC also made it clear that efforts are being made to open up recycling links to make consumers more willing to eliminate old products and upgrade consumption. In addition, the official issuance of 5G business license will also stimulate new consumer demand, HDTV, smart home appliances and other products and mobile phones and other electronic products consumption is expected to grow rapidly.

The performance of the heavy truck market in April and May is still not satisfactory.

According to production and marketing data released by the China Automobile Association, in May 2019, China's heavy truck market sold a total of 108300 models of various types, down 8.84 percent from the previous month and 4.68 percent from the same period last year. Failed to exceed the record high of 113600 vehicles in the same period last year. It is worth noting that since April, the heavy truck market has suffered a series of setbacks, and suffered the first consecutive decline this year. Heavy truck industry insiders believe that the decline in heavy truck sales in April and May is a clear signal, and the decline in the heavy truck market is expected to expand further in the second half of the year.

5. Local governments continue to make efforts to stabilize growth and push forward trillions of yuan investment plans for major projects.

In the run-up to the middle of the year, the pace of steady local growth has become even faster. Major project construction is still seen as a strong grasp of steady growth, Guangxi, Shandong, Anhui, Hunan and other provinces have issued a new batch of key project construction plans, involving trillions of yuan. It mainly includes traditional transportation, energy, 5G commercial, artificial intelligence and other new technology as the main direction of infrastructure.

Guangxi: issued the second batch of major projects at the autonomous region level, involving 178 projects, with a total investment of 301.87 billion yuan.

Guizhou: the Provincial Development and Reform Commission issued the second batch of major private investment projects in 2019, with a total investment of 151.524 billion yuan.

Anhui: Anhui Province recently issued a major provincial dispatching project plan for 2019, with a total investment of 1.1 trillion yuan.

Liaoning: the Liaoning Provincial Development and Reform Commission issued the "Liaoning Provincial General Airport layout Plan (2018-2025)" Plan "pointed out that by 2025, the province's new layout of 28 general airports, the total number of general airports reached 41.

Chongqing: speed up the construction of external channels, in accordance with the goal of "five years of full construction, 10 years of completion", focusing on the construction of 10 high-speed rail channels in the eight directions of Chengdu, Lanzhou, Xi'an, Zhengzhou, Wuhan, Changsha, Guiyang and Kunming. Construction of Lanzhou-Chongqing high-speed railway, Chongqing-Guizhou railway, high-speed rail along the Yangtze River, freight rail and other major transportation arteries.

6. Light truck market sales began to decline, light truck enterprises in the second half of the year may be difficult to start

In May 2019, the high-performing light truck market in the commercial vehicle market also began to show a decline in sales. In May, the domestic truck market sold a total of 316400 units, down 9.9 percent from the same period last year, while heavy, medium, light and micro fell 4.7, 50.8, 8.0 and 11.6 percent, respectively. Truck market segments all suffered a decline. Under the background of the overall downward trend of the automobile market, the light truck market is affected by the intensification of competition in the industry and the increase of external pressure. In the second half of 2019, light truck enterprises may have a difficult start.

7. Issue the "implementation Plan for winning the Battle of the Blue Sky in 2019"

Changchun area: strict environmental access management is required, and the environmental impact assessment of new, revamped, expanded iron and steel, petrochemical, chemical, coking, building materials, non-ferrous metals and other projects should meet the requirements of regional and planned environmental impact assessment. (strict environmental access management, speed up the elimination of backward production capacity and resolve excess capacity, deepen the control of industrial pollution, and so on.

Gansu area: speed up the relocation, transformation or closure of heavily polluting enterprises in urban areas, and promote the relocation of a number of heavily polluting enterprises, such as cement, flat glass, iron and steel, coking, chemical industry, etc. We will strictly control access to new projects, strictly control new production capacity in industries with high energy consumption and high pollution, strictly implement the policy of reducing and replacing industries with serious overcapacity, and speed up the elimination of backward capacity and the reduction of excess capacity.

Tangshan area: on the afternoon of June 13, the Tangshan Ecological Office openly interviewed "gunpoint" enterprises and enterprises that did not implement emission reduction controls at the conference center of the municipal government. On the afternoon of June 15, the responsible persons of nine polluting enterprises, including Tangshan Iron and Steel Co., Ltd., Jing'an Iron and Steel Co., Ltd., Chunxing Special Steel, Donghai Special Steel, Rongfeng Coking, HSBC Coking, Yannan cement and Black Cat carbon Black, made a public commitment to "actively cooperate with the municipal government to do a good job in environmental protection" and vowed to contribute to winning the Blue Sky Defense War and the 100-day battle.

8. Flood disasters occur in many places, and the risk level of torrential rain and waterlogging in the middle and lower reaches of the Yangtze River and South China is expected to be high next week, and the risk level of rainstorm and flood disasters in the middle and lower reaches of the Yangtze River and South China is expected to be high next week. Zhejiang, Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Chongqing, Guizhou, 54 cities, prefectures, 313counties and cities have been affected by this round of rainstorm and flood disasters, and this round of rainstorm floods has affected 6.14 million people in Zhejiang, Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Chongqing, Guizhou. The direct economic loss was 20.13 billion yuan. It is expected that the risk level of rainstorm and flood disaster in the middle and lower reaches of the Yangtze River and South China is high next week. From 16th to 19th, the rainfall area is mainly located in Guizhou, western South China and the middle and lower reaches of the Yangtze River. From the 20th to the 25th, the rain belt will be moved south from the Yangtze River Basin to the south-central part of the Yangtze River, and the rainfall area will be mainly located in the south of the Yangtze River.

9. Car sales continue to decline

According to the China Association of Automobile Industries, in May, domestic car production and sales completed 1.8483 million and 1.9126 million vehicles respectively, down 9.93% and 3.43% respectively from the previous month, and 21.16% and 16.4% respectively from the same score. Of these, the production and sales of new energy vehicles completed 112100 and 104400 respectively, an increase of 16.91 per cent and 1.8 per cent, respectively. In addition, new energy vehicles, which have been growing against the trend, have also hit the brakes at an all-time low. Sales growth slowed mainly because a large number of consumers bought new energy vehicles ahead of the end of the new energy subsidy transition period in 2019. At the same time, most bus enterprises have also chosen to speed up vehicle sales before subsidizing the retreat.

10. Property market transactions continue to be weak

The cooling continued in the first half of June, when the turnover of second-hand houses in 10 cities fell 7.5% from a year earlier. Property transactions in some Chinese cities continued to decline in the first half of June, on the basis of a multi-area adjustment and control of property sales in May and a drop in the property market in the first half of June. In the first half of June, the turnover of second-hand houses in 10 cities, including Beijing, Suzhou, Chengdu, Nanjing and Shenzhen, totaled 32071 units, down 7.5 percent from the same period in 2018.

11. Shanxi: 82 coal mines ordered to stop production and construction in accordance with the law

Shanxi coal mine safety supervision and law enforcement continues to maintain a high-pressure situation. The reporter learned from the Shanxi Provincial Emergency Management Office that from January to May, 82 coal mines were ordered to stop production and construction in accordance with the law, accounting for 8.3 percent of the total number of coal mines in Shanxi Province.

twelve。 Luliang City issues notice on the implementation of wrong Peak production and production restriction for some Enterprises around the Urban area

Recently, Luliang City issued a "notice on the implementation of wrong peak production and production restrictions for some enterprises around the urban area," which requires all asphalt projects in Luliang City and Zhou Bin, as well as local iron and steel, coking and other key industries to implement wrong peak production or production restriction measures. The contents of the specific documents are as follows: 1. Luliang urban area and all surrounding pavement asphalt projects should take wrong peak operation, the wrong peak operation time is 20:00 every night to 8 am the next day, the wrong peak operation time shall not be carried out outside the wrong peak operation time. 2. Luliang Lishi District Changsheng New material Factory, Luliang Xinchen Building Materials Co., Ltd., Luliang Lishi District Hengye New Building Materials Co., Ltd., three enterprises implement wrong peak production, the wrong peak production time is June 25 to July 25, 2019, the enterprise stopped production. 3. Shanxi Datuhe Coking Co., Ltd. implemented measures to limit production and emission reduction, extending the coking time to 48 hours, and the production limit was from June 25 to August 25, 2019. Luliang Yaolong Coal and Coke Iron Co., Ltd. implemented measures to limit production and emission reduction, limiting production by 50% for the period from June 25 to August 25, 2019.

13. Wu'an City issues Emergency Circular on strengthening Emergency Control measures for Air pollution

On the 21st, the Office of the leading Group for the Prevention and Control of Air pollution in Wu'an City issued an Emergency Circular on the implementation of enhanced Emergency Control measures in key areas. The Circular shows that the situation of the atmospheric environment in our city has been extremely severe since June. In order to ensure the air quality of our city and reverse the passive situation as soon as possible, with the consent of the municipal government, from 00: 00 on June 22 to 24:00 on June 30, 2019, strengthen emergency control measures will be implemented in the main urban area and the surrounding key areas, as follows: first, the scope of control and control, Wuan Town, Industrial Park, Beianzhuang Township, Kanger Town, Datong Town, Wu Ji Town, Shangtuan Urban and Rural areas, Xitushan Township 8 township administrative jurisdiction. II. Implementation time, from 0:00 on 22 June 2019 to 24:00 on 30 June 2019. 3. Measures related to the implementation of the iron and steel industry: 1. Xinjin Iron and Steel, Mingfang Iron and Steel, Wen'an Iron and Steel, Wenfeng Iron and Steel (excluding the Western District), all sintering machines in four iron and steel enterprises are in place from 0:00 on June 22 to 24: 00 on June 24, and from 0:00 on June 28 to 24-00 on June 30. Other production equipment shall be implemented in strict accordance with the differential control measures in the second quarter. 2. The coalification of Yuzhou within the jurisdiction. Jinpeng Coking two coking enterprises all extended the coking time to more than 36 hours.

 

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