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[SMM hot volume] what is the reason why the resource flow is relatively smooth and the inventory seems to be low?
May 25,2020 17:47CST
The content below was translated by Tencent automatically for reference.

Recently, the inventory of threads in some warehouses is too high, and the warehouse began to urge traders to step up shipments to maintain the liquidity of resources, and advised traders not to sell to some cash companies, so as to avoid the pressure of thread inventory in the flow of resources. While eating melons, I also took into account that this will happen when the stock of threads is high. What about hot rolls? Hot volume inventory is also relatively high, if the warehouse urges traders to step up hot volume resources, will it cause some spot companies to sell goods at low prices to depress current spot prices while spot prices are still in a pullback period? With this question, I did some research on the market and, incidentally, found out where the current inventory is distributed. It is understood that the current circulation of hot roll resources in various regions is better, and the situation of storage and processing in Kaiping in some areas is even higher than that of the same period last year, so even if the hot roll inventory is also at a high level, there is no big problem with the circulation. In the early stage of superposition, there have been some resources that have expanded the basis and entered the market, so the circulation of hot volume resources is relatively normal for the time being, and there is a high probability that there will not be a large number of resource selling to depress spot prices because of warehousing problems, so there is no need to worry too much about this. In addition, for the East and South China markets, the inventory in the hands of large households is not very high, but the regional inventory is still large. SMM conducted a survey on the problem, and there are roughly three reasons for this situation. First, some small traders have goods in their hands, and most of them are about twice the normal level. Second, some large companies and current companies do have some hot roll resources on the disk, which have not yet been solved. Third, under the limitation of the proportion of varieties and specifications ordered by steel mills, some of those that are difficult to sell have accumulated. The superposition has led to a situation where inventory does not seem to be high, but the actual data show a higher level.

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