[SMM hot coil] the output of the hot rolling plan of the mainstream steel mill continued to decline in October, down 3.37% from the previous month.

According to the latest survey of SMM Iron and Steel, the main plan of the hot rolling mainstream steel mill in October 2019 is to produce 8.9904 million tons, compared with the actual output of 9.3036 million tons in September-3.37%; the planned export volume is 472000 tons, the month-on-month ratio is-5.0%; the domestic output is 8.5184 million tons, the month-on-month ratio is-3.3%. According to the data, the total output of hot rolling continued its downward trend in September, mainly due to the impact of environmental protection and production restrictions on the output of steel mills and the maintenance of steel mills. Details are as follows,

Output: on the eve of National Day, in order to ensure the smooth progress of the 70th anniversary parade, various regions have issued news of environmental protection and production restrictions, resulting in the production of most steel mills across the country affected to varying degrees, steel production is also reduced. At the same time, due to the concentration of hot rolling mills near Beijing, Tianjin and Hebei, the hot rolling output has been significantly reduced this month.

In addition, the new overhaul of hot rolling mills such as Baotou Iron and Steel Co., Angang and WISCO this month (the overhaul of new steel mills in October affected the total amount of hot rolling by 467300 tons, and there was still a reduction of 162200 tons after overhauling and resuming production in September). It has also contributed to a reduction in the planned output of hot rolling mills this month. In addition, since September, the spot price of hot coil has continued to fall under the pessimistic expectations of the market and the bad news, while the spot price of cold rolling is relatively stable under the condition of relatively good fundamentals. As a result, the cold and heat price difference continues to widen (as of today, the cold and heat price difference is 603 yuan / ton), the cold rolling production profit of steel mills has rebounded, and the production enthusiasm has also been improved, so there are some hot transfer cold operations to promote the reduction of hot rolling production.

Export: since the beginning of this year, Sino-US trade frictions have led to an unstable macroeconomic environment, steel exports have been greatly affected, exports have continued to decline, coupled with the continued weakness of hot-rolled foreign trade prices (as of yesterday's foreign trade price of 452 US dollars / ton), steel mill exports are in a state of loss, so steel export power is insufficient, so non-agreed export steel mills basically choose domestic sales mode.

Northern region: the planned volume of hot rolled coils is 4.4797 million tons, a month-on-month ratio of-9.49%. The environmental protection and production restriction control in this area is relatively strict, so the production of the steel mill is restrained to a great extent, and the planned export volume is 240000 tons, which is basically stable.

East China: the planned volume of hot rolled coils is 2.957 million tons, with a month-on-month ratio of + 4.7%. The area is less affected by environmental protection and production restrictions, coupled with the restoration of production, so the output of steel mills has increased, and the planned export volume is 231000 tons, which is basically stable.

Central and South China: the planned volume of hot rolled coil is 1.17 million tons, which is the same as that of the previous month, and the export is 1000 tons, which is-96.42% of the total, which is mainly affected by the reduction of output caused by the maintenance of steel mills.

Western region: the planned volume of hot rolled coils is 383700 tons, with a month-on-month ratio of + 6.2%, and there is no export yet.