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[SMM hot coil inventory analysis] Plant warehouse decline "side impact" supply reduction fundamentals are expected to improve
Jul 25,2019 18:00CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

In terms of treasury: this week, the total inventory of hot rolls nationwide was 3.4185 million tons, a month-on-month ratio of + 0.5 per cent and a year-on-year ratio of + 8.1 per cent. Although the general treasury continues to accumulate, the fundamentals are still weak, but from the trend of continuous narrowing of the growth rate of the general treasury in the past two weeks and the decline of steel plant inventory this week, it can be seen that the follow-up fundamentals are expected to improve. Among them,

 

Steel plant inventory: this week's hot rolling mill warehouse 974100 tons, month-on-month ratio of-2.1%, compared with the same period last year-4.4%. This week's decline is mainly due to the fact that Tangshan environmental protection continues to be strict (the new document says that from July 26 to July 28, except for some coastal areas and involving the relocation of steel mills, all the other steel mills are stuffy, and the implementation of research feedback has indeed been implemented. ), the production of steel mills in Tangshan area has been greatly restricted, which has led to a significant reduction in hot rolling output (since environmental protection and production restriction, the total amount of plate affected by strict production limit documents has been estimated to be 1.386 million tons), so the storage of hot rolling mills has decreased.

 

Social inventory: hot rolled this week 2.4444 million tons, month-on-month ratio + 1.5 per cent, year-on-year + 14 per cent. This week, the social database continues to accumulate mainly because, at present, it is still in the off-season of demand, although the speculative trade is more active in the early stage due to the convergence of the base difference, but because the mainstream market orders from steel mills are in the inverted state, therefore, the speculative traders take more goods from the market, so it does not lead to more digestion in the social database.

 

In addition, another good news worthy of attention is that feedback from terminal research is the peak season for the production of cars and household appliances after September, so under the influence of the stock preparation cycle, after the August high temperature holiday, some terminals will enter the stage of purchasing ahead of schedule. Therefore, it is expected that the overall demand situation in August may pick up in the off-season.

Therefore, in general, in the near October 1 70th anniversary parade Tangshan environmental production restrictions still have a strict trend and demand expectations may pick up, the fundamentals are expected to improve in August. Therefore, the spot price under the support of high cost, large probability concussion upward. [SMM Steel]

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