Recently, it is an indisputable fact that the market mentality is pessimistic, mainly because the pressure on the supply side is high compared with the demand side of stable release. On the one hand, at present, steel mills still have profits in the production of rebar: according to SMM estimates, as of today, the production profit of long-process steel mills is 408.8 yuan / ton, and most steel mills feed back their thread production profits of 100-300 yuan / ton, so the steel mills do not have the willingness to reduce production actively for the time being. On the other hand, in terms of the implementation of the maximum interference-environmental production restrictions, it is still not as expected. According to SMM research, at present, entering the "heating season environmental protection production limit" in Beijing, Tianjin and Hebei and the surrounding areas, the impact of production restriction is very limited. Among them, although the Tangshan area steel mill receives the production restriction notice one after another, but the control time is short, and the production restriction way is to rest the wind, the furnace stops production. Some "passageway cities" steel mills in Shandong have been implementing production restrictions of 30%-50% since the 19th, but production will also resume one after another in the near future. The same is true of Shanxi. In the case that the steel plant can resume production at any time, the environmental protection production limit only plays a role in alleviating the inventory pressure of the steel plant, and has little impact on the supply end. At present, although the feedback of most steel mills has a certain inventory pressure, it is still within the controllable range, and there is still some distance from the level of "high history". In addition, the current demand is still strong, and the later infrastructure industry will also continue to "support the bottom" rigid demand for building materials. Therefore, the market mentality into the "rainy season" at the same time, the steel mill is relatively rational. However, in the market pessimistic bearish mentality, the spot price is affected by the sentiment weakens. With the gradual approach of the off-season, fundamental support is not as good as the current, the price downward channel will also officially open.

[specific steel mill feedback is as follows] Steel Plant A (Shandong): at present, the production is limited to 50%, starting from the 19th, and production is expected to resume in two days. Recently, the inventory pressure is not great, and the shipping condition is relatively stable. The profit of threaded steel is about 300 yuan. Steel mill B (Hebei): now the thread profit is nearly 200 yuan, the local demand is OK, coupled with the price in South China does not have much advantage, there is no willingness to go south for the time being. There is no inventory pressure for the time being and a 30 per cent production limit is currently in place. Steel Plant C (Hebei): the implementation of production restrictions during the National Day is very strict, production has resumed after the festival, the current production limit is about 20%. Because the profit of thread in steel plant is lower than that of hot coil and other kinds of steel, the production of thread is mainly reduced. Steel mill D (Central China): now the inventory pressure is not great, nearly 20,000, because iron ore, coke prices have declined, profits have also recovered. Steel Plant E (Central China): a total of three blast furnaces, only one blast furnace is now in tremor production. At present, the profit of thread is still the best, so the current production line mainly produces small size thread. (according to the steel plant agent feedback, because the early steel mill billet is insufficient, and recently has been in the production limit, stop production, so its thread resources are very scarce) steel plant F (East China): so far this year has not heard any news about environmental protection production restrictions, so the production rhythm is normal, now inventory pressure, but not big, for the late spot price is considered to decline in 300 yuan / ton. It is mainly the bottom of demand. Steel mill G (southwest): recently arrived at the south node of Shanxi and Shaanxi resources, dragging down the local steel prices, especially the disk line prices fell a lot. Shipment is relatively good in the past two days, but the inventory pressure is still relatively large. [SMM Steel]