[SMM analysis] there is some differentiation in terminal performance. Galvanizing consumption will remain in the short term.

SMM5 March 22:

The center of gravity of black commodity prices continued to move upward this week, with hot volumes showing a strong performance, with recent intraday highs recorded. On the spot side, as of May 21, the stock of hot coils in seven regions of the country this week was 2.91 million tons, down 149600 tons from last week; the inventory of cold rolling was 1.3194 million tons, down 15900 tons from last week. The steel market continued to go to the warehouse, and both the social warehouse and the factory warehouse declined. This week, the two sessions, the macro mood is good superimposed steel continued to rise, traders shipping mood is better, and for the future to maintain a cautious point of view; and downstream procurement is mainly phased bargain replenishment. The price difference between hot and cold this week is 356 yuan / ton.

Galvanized pipe, according to SMM research, the current galvanized pipe factory operating rate is still high, the overall order in May is maintained compared with April, and black continues to rise, the enterprise production enthusiasm is better. In terms of galvanized structural parts, domestic infrastructure orders still play a strong pulling role, but according to SMM research, some enterprises with the proportion of export orders still rely on previous domestic orders to maintain a high operating rate. If overseas orders are not restored in the future, they will be gradually transmitted to the production of domestic enterprises.

On the demand side of the galvanized sheet factory, according to the data released by the macro structure, automobile production and sales improved in April, the decline in retail sales of cars above the quota narrowed to zero, and the growth rate of automobile production also rebounded to 5.1%. In the first 17 days of May, the wholesale growth rate of passenger cars continued to pick up to 12%, while retail growth slowed slightly to-5%, but it was still higher than in March, pointing to continued improvement in demand. Although affected by the extension of the May Day holiday, the start-up rate of half-and-a-half steel tires fell sharply to 28.3% in the first week of May, but rebounded to 60.2% in the second week, with a year-on-year decline significantly narrowing, pointing to an improvement in production in line with demand. As of May 21, the BDI index was 494, up 87, or 21.38%, and its low rose slightly, but it still shows that the shipping market is in the doldrums. In terms of real estate data, prices in 70 cities rebounded to 0.4% month-on-month in April, but continued to fall to 5.2% from a year earlier. In the first and middle of May, the decline in 35 urban land production and sales narrowed to-8.1%, and the loan interest rate for the first suite in 35 cities continued to decline to 5.3% in May, superimposed with a significantly lower base in the same period last year, all of which led to a rebound in real estate production and sales compared with the same period last year. Among them, the improvement in first-and second-tier real estate sales is relatively large, but the inventory-to-sales ratio of commercial housing in the top ten cities rose to 50.8 weeks last week, which is still on the high side, while third-and fourth-tier real estate sales are still weak. The national land market improved significantly in April, but has weakened since May. In terms of home appliance data, thanks to the lower base in the same period of 19 years and the improvement in demand brought about by the resumption of the market, the year-on-year growth rate of home appliance audio retail sales above the limit significantly narrowed to-8.5% in April. However, the production side showed slight weakness. In April, the growth rate of the three major white electricity production rose less or less, of which the growth rate of air conditioning production narrowed slightly to-17.3%, but it was still low. The growth rate of refrigerator and washing machine production turned negative due to the rise of the base in the same period last year, falling to-3.3% and-10% respectively.

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