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[SMM thread] Weather Forecast Little Assistant online: will steel prices enter the rainy season in June?
May 25,2020 19:40CST
translation
Source:SMM
By observing the weather data of mainstream markets in the next 40 days or so, SMM found that precipitation and high temperatures in most markets are concentrated in mid-June and late May. Under the general high temperature expectations from July to August, June is the best time to rush to work, while the relatively good weather conditions in mid-to-late June may be the best time for steel prices to rise in the second and third quarters.
The content below was translated by Tencent automatically for reference.

 

At a time when inventories are still on the high side and the output of steel mills refreshes the peak of previous years, the differences among people from all walks of life on the future market are mainly concentrated in the area of demand, especially the "Meiyu" weather in June has become an important crux of the bearish market in East and South China.

So what's the actual situation?

Figure 1: weather conditions in mainstream markets in June

Data source: SMM collation

According to the statistical results, after the beginning of the rainy season in June, the number of weather (moderate rain, heavy rain, torrential rain and high temperature (38 ℃ and above) which is not suitable for construction in various places has indeed increased significantly compared with May, even the number of key weather in June last year has also increased significantly.

It is undeniable that with the aggravation of seasonal interference, the release of terminal demand will indeed be hindered to varying degrees, especially in central China (high temperature) and southwest China (precipitation).

So will steel prices enter the traditional off-season together with the weather?

Affected by the epidemic, terminal construction-related enterprises are facing urgent demand for work this year. After the attack of the "Black Swan" incident, the recovery of overall terminal demand this year has been delayed by nearly two months compared with previous years, the traditional "peak season" has been delayed, and most terminal enterprises have rush or new construction demand (see the follow-up SMM terminal demand report sunrise for details), and can offset the negative impact of precipitation weather on the overall construction quarter by expanding construction personnel.

By observing the weather data of mainstream markets in the next 40 days or so, SMM found that precipitation and high temperatures in most markets are concentrated in mid-June and late May. Under the general high temperature expectations from July to August, June is the best time to rush to work, while the relatively good weather conditions in mid-to-late June may be the best time for steel prices to rise in the second and third quarters.

 

 

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