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[SMM Thread Analysis] the situation of double increase in the social database of the factory reappears, is the demand really so poor?
Jul 11,2019 18:47CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

 

Total inventory:

Total thread stocks this week were 8.0752 million tons, up 17.58 tons from last week, or + 2.2 percent from the previous week, and up 152.13 tons from the same period last year, up 23.29 percent from the same period last year.

Social inventory:

This week, the screw thread stock was 5.773 million tons, up 29900 tons from last week, up 0.5 per cent from the previous month, and up 1.1461 million tons from the same period last year, up 24.8 per cent from the same period last year.

In-plant inventory:

Inventories at the plant this week were 2.3023 million tons, up 146000 tons from last week, up 6.8 percent from the previous month, and up 375300 tons from the same period last year, or + 19.5 percent from the same period last year.

 

This week, the building materials headquarters continued to accumulate, and showed a double increase in the factory social database. Among them, the social database has increased for five weeks in a row, mainly because since June, the release of demand for building materials has been suppressed by seasonal interference, and the enthusiasm of terminal procurement is not high. As for the factory warehouse, after two consecutive weeks of continuous decline, it began to accumulate again this week. Mainly due to:

1. Although affected by the production restriction, the thread output this week is slightly lower than that of last week, but since the end of the year, the thread profit situation has been higher than that of other common steel varieties for a long time, and the steel mill has been full of enthusiasm for thread production and full firepower. Thread output has been higher than the same period last year;

In February and late June, thread prices hit bottom under the stimulus of environmental protection and production restrictions in many places, spot prices fluctuated upward for two weeks in a row, and traders' mood for taking goods increased, resulting in factory warehouses falling for two weeks (126000 tons and 42200 tons, respectively). However, since this week, except that Tuesday's snail prices have been boosted by the news that Wu'an 's production restrictions are superimposed by environmental supervision and inspection, driving a slight increase in spot prices, The overall shock is weak, and there are no other bright spots, and traders are less motivated to take goods.

3. The weather of heavy precipitation in many places in the south this week is continuous, and even the State General Control Bureau launched the Class IV emergency response at 20:00 on 9 July. It is required that the Flood Control and drought Relief headquarters of Inner Mongolia, Zhejiang, Anhui, Fujian, Jiangxi, Hubei, Hunan, Guangdong, Guangxi, Guizhou, Gansu, Ningxia and Qinghai provinces and the relevant river basins should initiate the corresponding level of emergency response in accordance with the regulations, under the influence of which the terminal demand is not released smoothly. Inventory accumulation is to be expected.

It is worth noting that under the influence of environmental protection and production restrictions, thread production has dropped somewhat this week, but according to the latest production restriction documents released in Tangshan on July 2, some steel enterprises, such as Tianzhu Iron and Steel and West China Iron and Steel, are no longer subject to production restrictions after 15 days, and the supply of building materials may increase again. In addition, at present, some parts of the south are still affected by continuous precipitation weather, and the release of demand is still restrained, so in the short term, Inventory accumulation may be difficult to reverse. However, due to the late "plum" in East China, demand may be accelerated release, steel mills generally feedback on the late rigid demand for building materials is still expected, the market bullish sentiment still occupies the mainstream.

[feedback on research]

Steel mill A (North China): at present, the factory warehouse is maintained at a normal level, the sales model is mainly long association and direct supply, there is no sense of weakening demand.

Steel mill B (northwest): this month, there is no maintenance plan, long-term full production, demand is still normal release, plant reservoir is also at the normal level, about 110000 tons.

Steel mill C (East China): conventional inventory of 70-80, 000 tons, the current inventory at 100000 tons, belonging to the normal high level, the day before yesterday when the price rose slightly when the shipment is better, the last two days shipment is only 40% 50% of the previous period. Overall, it's not as good as the last two weeks.

Steel mill D (East China): it has been raining heavily this week and stocks are currently at a high level of 22000 tons, mainly because of the heavy rain this week, which has curbed the release of demand.

Steel mill D (South China): inventory has not accumulated compared with last week, shipment situation is still relatively good.

Steel mill E (southwest): the conventional warehouse has 40, 000 tons, currently at 55000 tons, and the weather and relatively low prices this week have been important factors affecting shipments.

 

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