The total national stock of hot rolling this week was 3.0736 million tons, a month-on-month ratio of-6.9% and a year-on-year ratio of-9.4% The overall continuation of last week's decline trend, and since the National Day has been three consecutive weeks of year-on-year decline, driving the fundamental pressure continued to ease. Among them, social inventory: this week social bank 2.1733 million tons, month-on-month-7.7%, year-on-year-11.4%, the decline continues and the rate of year-on-year decline is larger. Mainly due to steel plant production reduction and rigid demand is still driven. Among them, the production reduction of steel mills: according to the feedback of SMM research, the environmental protection production restrictions in Tangshan, Handan, Wu'an and other places have not been terminated after the National Day, and the restrictions on the production of steel mills have been sustained, resulting in a reduction in the overall hot rolling output. Under the influence of the shipping cycle, the reduction has been reflected in the market one after another, and the reduction in goods from the mainstream market this week can be seen. As a result, the overall market supply has decreased this week. Rigid demand situation: although the market pessimism continues this week, but in the case of low prices for traders, the overall terminal pick-up rhythm is relatively stable, coupled with the recent easing of Sino-US trade frictions slightly boosted market sentiment, so the release of overall rigid demand is still relatively stable, driving hot rolling inventory digestion. Steel mill inventory: this week, the factory warehouse 900400 tons, month-on-month-5.1%, year-on-year-4.2%, continuing the downward trend. The main reason for the reduction of storage is still that the production of steel mills is restricted. On the one hand, Hebei environmental protection production restrictions are still continuing, and there are phased stricter measures, resulting in a decline in the output of steel mills in this area. On the other hand, some steel mills in other areas continue to overhaul (WISCO, Angang, Angang and other steel mills), affecting the normal production of steel mills. Therefore, as a result of the overall decline in steel production, so in the case of pre-orders still continue to ship, resulting in a continuous decline in the warehouse.
However, it is worth noting that some of the market social base data do not really reflect the inventory pressure in the market. Mainly due to the Wuxi viaduct incident, the control of road transport in many places has been tightened (Shanghai, Zhangjiagang, Wuxi, Lecong, Shandong and other places have been tightened to varying degrees), steel and steam transportation has been greatly restricted, resulting in more resources stranded in the port has not yet entered the warehouse. This part of the resources are not included in the social base statistics, so the actual inventory pressure in some markets is greater than the data. At the same time, in the case of good data performance can not boost the spot price, the subsequent accumulation of resources into the warehouse plus new resources to the market, the spot price will bear more pressure. [spot]
Although this week, driven by the continuation of the decline, fundamental pressure continues to ease, but the spot price performance has not fluctuated significantly. Mainly because the pessimistic mood in the current market is still strong, traders are more willing to reduce warehouses at low prices, so even if the good news of China and the United States and the news of environmental restrictions continue to be released, the impact on the market purchasing mentality is not as expected, and it only plays a temporary role in stabilizing the spot price. After the news hype, return to the overall supply and demand fundamentals, then the overall decline in spot prices is difficult to change. [SMM Steel]