SMM forecast: it is estimated that in early August, the ex-factory price of Shagang rebar is 100 to 130 yuan / ton, that is, the third-grade big screw (ex-factory price is 4170 yuan / ton), the cost of Kuti in East China is 4120 yuan / ton, and the cost of the plant is 4070 yuan / ton.
Basic analysis: on the supply side, although the production of this ten-day thread has become stricter in Tangshan (except Grade A and coastal and relocation of steel mills for three days), and some electric arc furnace steel enterprises in some areas have been reduced under the double influence of production reduction operation under the pressure of loss, they are still at a high level (according to China Steel Association data: the first half of this year). A total of 404 million tons of pig iron, 492 million tons of crude steel and 587 million tons of steel were produced in the country, up 7.9 per cent, 9.9 per cent and 11.4 per cent respectively over the same period last year. In particular, according to SMM statistics, the production of mainstream steel mills in East China increased by 2.98 percent in July compared with June (Shagang's thread production in July reached a new high after the year). In addition, although the environmental protection and production restrictions in August have become stricter and looser in the market, so far, there have been no stricter documents issued in East China, so the situation of high supply may be difficult to improve in the short term. Demand side, the southern market Meiyu after the high temperature attack, the high temperature site can still be wrong construction, the demand has improved compared with the previous period, but some of the construction rate is still a drag, the off-season has not yet come out. According to statistics, as of today, there are 704000 tons of thread bank in Hangzhou, an increase of 29000 tons over the previous ten days (19), and the cumulative pool is still in progress. Therefore, on the whole, the resistance to steel price rise is still large.
However, on the one hand, short process steel mills have also entered a state of loss under the rise of scrap prices. According to SMM research, the scope of production reduction in electric arc furnace steel mills has been expanded. On the other hand, the cost support of the long process steel plant is still strong: since this ten days, the spot price of iron ore has been maintained at 876 yuan / ton, and the coke price has risen by 100yuan / ton (taking Tangshan quasi-first class metallurgical coke as an example, the price is 2010 yuan / ton as of today). In this case, according to the SMM data model, as of today, the ten-day cost of rebar in long process steel plant is 3229 yuan / ton (the first ten days is 3214 yuan / ton). Therefore, in this case, steel mills or in order to maintain their own profits, flat price. According to SMM steel data, the average selling price of Shagang resources in Hangzhou is 4034.68 yuan / ton, and the loss per ton of steel is 85.32 yuan. According to the investigation, as of July 29, the market price in Hangzhou area is 3990 yuan / ton. Traders feedback that the situation of inverted hanging is relatively serious, the actual loss is about 100 yuan / ton, and the steel mill may make up 100 yuan / ton. Cost: according to the SMM iron and steel data model, according to the 118.2 US gold mine, the thread cost of the long process steel plant is 3656 yuan / ton (excluding financial cost), and the thread profit is 274yuan / ton. The data show that as of today, the average thread profit of the steel plant is 327yuan / ton. Order ratio: Yonggang 8 to 1 discount: 30% discount for rebar (7.5% discount for previous period), full discount for wire rod and coil (full discount for previous period) [SMM Iron and Steel]