[forecast of Shagang]

Published: Jun 28, 2019 19:15 (GMT+8)

SMM forecast: it is estimated that the ex-factory price of rebar in Shagang is expected to increase by 100 to 150 yuan / ton in late June, that is, the adjustment of the third grade big screw (the ex-factory price is 4070 to 4120 yuan / ton), the cost of Kuti in East China is 4020 to 4070 yuan / ton, and the cost of the plant is 3970 to 4020 yuan / ton. Basic analysis: on the supply side, according to SMM research, the warehouse of Shagang Plant is at a reasonable level and there is no shipping pressure. On the demand side, under the stimulation of the production restriction news, the spot price of thread rose nearly 100 yuan / ton, and the mentality of traders came out of the inverted state, and their mentality improved greatly. in particular, spot prices rose rapidly around the place on Monday, and merchants actively replenished the warehouse under the mentality of "buying up or not buying down." traders are also generally feedback that terminal demand is still steadily released, although this week's Hangzhou social inventory increased month-on-month compared with last week. However, the daily exit situation is good (the average daily output in Hangzhou is 26000 tons), and the demand for building materials is good. In addition, due to the previous steel mills have fallen sharply in a row, steel mill profits have been compressed, in this case, steel mills have a good chance to raise prices, factory prices up 100 to 150 yuan / ton.

Compensation: according to research, as of June 28, Hangzhou Shagang resources quoted price of 4070 yuan / ton, businesses feedback the actual profit of about 4070 yuan / ton. According to SMM steel data, the average selling price of Shagang resources in Hangzhou this day is 4023 yuan / ton, and the profit per ton of steel is 103 yuan. It is estimated that the steel plant will not make up for the difference. Cost: according to the SMM iron and steel data model, calculated by 113.8 US gold mine, as of June 27, the thread cost of long process steel plant is 3642 yuan / ton (excluding financial cost), and the thread profit is 318 yuan / ton. Delivery ratio: in 2019, Shagang fully discounted the planned amount of thread in July, Zhongtian 7 / 1, 10% discount for thread (20% discount for previous period), 10% discount for wire rod and coil (10% discount for previous period), 10% discount for wire rod and coil (10% discount for previous period), 6.5% discount for screw thread (8.5% discount for previous period), 20% discount for wire rod and plate screw (40% discount for previous period). [SMM Steel]

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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