[SMM thread] the fundamentals are weak, when the library continues.

The total national stock of threads this week was 4.9014 million tons, + 2.5 per cent month-on-month. The accumulation continues, and with the weakening of the demand end in the later stage, the probability of inventory accumulation continues to accelerate.

Table 1:

Source: SMM

Table 2:

Source: SMM

Of this total, social inventory was 2.8347 million tons, an increase of 79600 tons (+ 2.9 percent) over the previous month, or-9.7 percent from the same period last year.

The accumulation range of thread social bank has increased this week. This week's shipments were significantly weaker than last week, mainly due to seasonal disturbances on the demand side. However, according to SMM statistics, the current thread social library accumulation rate is significantly lower than the same period last year. In addition to the impact of "warm winter" weather, the low willingness of traders to purchase on their own initiative and the increase in the proportion of direct delivery terminals from steel mills have led to a relatively small amount of resources flowing into the social treasury; and some of the resources of Hong Kong pressure are not included in the social treasury statistics are also important factors.

The factory was 2.0667 million tons, an increase of 40700 tons (+ 2 percent) over the previous month, or + 8.2 percent over the same period last year.

As of this week, the average spot price of thread is 46 yuan / ton higher than the same period last year, and the market wait-and-see mentality occupies the mainstream, the willingness of traders to store winter is low, and the winter storage policy of steel mills is still in its infancy, so the warehouse continues to accumulate.

However, unlike the social bank, due to the expansion of production this year (according to the National Bureau of Statistics, China's steel bar production in November was 22.408 million tons, an increase of 17.7 percent over the same period last year; the output of wire rod (wire rod) was 13.521 million tons, up 3.1 percent from the same period last year). The size of the thread factory warehouse is higher than that of the same period last year.

In the later stage, the fundamentals of the northern market are "both weak in supply and demand"-the demand is weak, but the local steel mills are willing to ship southward, and the local spot price has dropped to the low point after the year, and the probability of large spot price in the later stage is relatively strong. For example, the spot price in the Beijing market has shown signs of backpumping recently.

However, with the gradual relief of the problem of pressing Hong Kong in the north, the supply pressure in the southern market, especially in South China, will continue to increase, and the downside risk of spot prices will be relatively stronger.