[SMM Thread Analysis] Thread inventory fell three times in the second week after the section, and demand was resilient during the peak season.

Thanks to continued demand during the peak season, thread inventories returned to three declines this week. According to SMM, as of today, the total thread warehouse this week is 6.7965 million tons, down 591800 tons (8%) from the previous week, of which the factory warehouse is 2.4802 million tons, down 45200 tons (1.8%) from the previous week, and the social bank is 4.3163 million tons, down 546600 tons (11.2%) from the previous week.

Although the recent full production enthusiasm of steel mills at the same time, some pre-production regional steel enterprises temporarily "get rid of" shackles, thread supply reappearance increment, but the peak season rigid demand does not live up to expectations, coupled with some traders choose to sell goods at a low price under pessimistic expectations, so that the social treasury has dropped sharply, and the rate of decline has even reached a new high after the year. On the other hand, speculative demand is dormant because of poor mentality, coupled with the recent strict investigation of overloading problems have also affected the transfer efficiency of supply from factory warehouse to social warehouse to a certain extent, so the decline rate of factory warehouse is relatively poor.

In the later stage, the pressure on the supply side is still not to be underestimated, especially in the case of the gradual weakening of demand in the north under the influence of the weather, the northern material has been pulled to the south one after another, and the pressure on the supply side of the southern market is relatively greater. In addition, most of the market for the future spot prices are short, so although the peak season demand still has a strong support to the spot prices, but the downside risk can not be ignored.