On the treasury side: the total inventory of hot rolls nationwide this week was 3.3485 million tons, + 3.9% from the previous week and + 6.9% from the same period last year. The rise in the general treasury this week was mainly due to the simultaneous increase in the factory treasury and the social treasury, both of which were the biggest gains in the near future.

Steel plant inventory: this week's hot rolling mill warehouse of 965000 tons, month-on-month ratio of + 6.8%, year-on-year-7.7%. The increase in the factory warehouse this week is mainly due to,

The main results are as follows: (1) due to the weak demand of cold rolling terminal, the spot price of cold rolling continues to fall, and the price difference between cold and hot rolling continues to shrink, so the profit of cold rolling is gradually reduced, or even in the loss stage, so the steel mill has no choice but to reduce the production of cold rolling and increase the production of hot rolling. And after entering the off-season in July, demand is weaker, thus triggering a large area of steel plants to reduce cooling and heat transfer, resulting in a sustained increase in hot rolling production (the total amount of cold and heat in sample steel plants reached 450000 tons in July).

(2) at the beginning of this month, some steel mills resumed production (Ninggang resumed production on July 2, Cangzhou China Railway resumed production on July 3, Shougang Qianan resumed production on July 6), after a week of commissioning, production has been fully resumed, resulting in an increase in hot rolling output.

(3) according to the investigation and feedback of steel mills, a large part of the current factory warehouse is the pre-order resources, but because the early speculative trade is currently in the fastening stage, the speculative orders have not yet been picked up, coupled with the recent rainstorm weather, spot resources are difficult to ship, resulting in an increase in steel mill inventory.

In addition, steel mills reflected that inventory levels this week did not cause greater concern, only short-term circulation inventory, the resumption of normal shipping will improve.

Social inventory: this week hot rolled social warehouse 2.3828 million tons, month-on-month ratio + 2.7%, year-on-year + 14.2%. The social base continues to grow, and the growth rate continues to grow. Mainly due to the continued weakness of terminal demand since June and the fact that the arrival of long-term resources in the early period has led to the continuous accumulation of the social database, the steel mills, which account for a large proportion of the terminal investment this week, have increased the additional investment, thus leading to the accumulation of the social database.

It is worth noting that after entering the middle and late July, some Tangshan environmental protection production restriction steel plants will temporarily lift the production restriction and resume normal production (from July 15 to July 31, Shougang, Tianzhu, Wenfeng and other steel mills can resume normal production). Therefore, in the cold to heat increment hedge early environmental protection production reduction, it is expected that the supply will increase in late July, spot prices may have a downward risk. However, it is worth paying attention to the fact that there is still great uncertainty in the current macro fundamentals. If there is good news from the recent Sino-US trade negotiations, or if all aspects of the macro data perform well in June, there will be a greater stimulus to spot prices. [SMM Steel]