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[SMM Hot Coil] the peak season is fading-- the receipt of orders by steel mills in November is revealed in advance.
Oct 23,2019 17:29CST
The content below was translated by Tencent automatically for reference.

According to a survey by SMM Steel Mill, most steel mills (except 100% agreement households selling steel mills) have received feedback on the deviation of hot rolling orders so far in November, which is less than the number of orders received in October. Mainly due to, on the one hand, the new production capacity of steel mills is larger, the market expectations for the fourth quarter are more pessimistic, traders are less willing to order; on the other hand, the peak season is fading, coupled with the cold weather in the north, terminal demand has fallen back. The feedback from the specific steel mill is as follows.

North China GL:100% agreement account sales, receiving orders is normal. However, under the influence of environmental protection and production restrictions, the output of steel mills declined this month, and the previous orders were slightly overstocked, so it is expected that the delivery of pre-orders is still the main factor in early November.

The ZH: in North China fell back in November, and the cold rolling base material was OK. Among them, the base material in the cold and heat price difference expands, the cold rolling profit picks up the situation, the demand is better, and mostly sells in the local. On the other hand, the general volume is affected by the high ex-factory price and the continued unsatisfactory settlement policy of the steel mill.

North China BG: has just adjusted the ex-factory price so far, and recently began to take orders in November one after another.

East China RG: agreement and lock price coexist, recently in the upside down and pessimistic attitude to curb demand, lock price resources to receive orders is not ideal. Up to now, the receipt of orders for agreement resources is also more general;

SG: in East China is affected by the adjustment of the production and sales plan of the steel plant (the steel mill is converting to high value-added varieties). Now the general coil has stopped receiving the order one after another, and the time for resuming the order is uncertain, so the situation of receiving the order in November is not clear.

East China SG: almost 100% agreement households, November orders are more stable. However, due to the limitation of transportation control, it is difficult to ship the order resources, resulting in an increase in the inventory of steel mills.

Due to the stricter control of environmental protection and production restriction in central China, the output of steel mills has declined, coupled with the synchronous suppression of demand, so the overall acceptance of orders in November is on the weak side. In terms of production, only 4800 blast furnaces are in production, 2200 blast furnaces have been shut down since National Day, and 2800 blast furnaces have recently entered a sultry state, and the time for resumption of production has not been determined. At the same time, because of the profit among varieties, the main varieties are small thread and medium thick plate, and the hot rolling line is basically in the state of shutdown (50 000 tons in October, 320000 tons in conventional, and less than 50 000 tons in November).

The monthly deviation of AG:11 in Northeast China is higher than that in October. Mainly because of the cold weather in the north, some terminal enterprises have stopped production one after another (pipe factory, construction site, etc.), the local demand has fallen back, and under the influence of upside down and pessimistic mentality, the enthusiasm of ordering is not high, which leads to the weakness of steel mills in November.

Southwest PG: mostly for agreement sales, this part of the current November order is relatively stable, non-agreement resources as of November order deviation. Non-agreement resources are mainly aimed at automobile and home appliance terminals, and this part of the demand is more cautious after the peak season and under the influence of pessimistic expectations in the future.


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