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[SMM thread] those who become "steel prices" will not be afraid of short-term overcast and rain.
Jul 2,2020 20:22CST
translation
Source:SMM
SMM7 March 2: the threaded library continues to accumulate under the continuous interference of seasonal precipitation this week. As of July 2, the country's total inventory of building materials was 10.6024 million tons, with a month-on-month ratio of + 4.6%, compared with the same period last year.
The content below was translated by Tencent automatically for reference.

 

SMM7 March 2: the threaded library continues to accumulate under the continuous interference of seasonal precipitation this week. As of July 2, the country's total inventory of building materials was 10.6024 million tons, with a month-on-month ratio of + 4.6%, compared with the same period last year.

Table 1: Overview of thread inventory

 

Source: SMM

Table 2: comparison of Thread inventory prices from 2018 to 2020

 

Note: due to the epidemic factors since 2020, due to the different opening times in different places, there is a certain error in the actual spot average price; the time dimension is the Gregorian calendar date.

Source: SMM

 

Specifically:

Social stocks were 7.1925 million tons, an increase of 241900 tons, or + 3.5 percent month-on-month, with an increase of 1.9 percentage points, or 25.2 percent over the same period last year.

The threaded library continues to accumulate this week, and the increase continues to expand. The precipitation was concentrated in late June, and terminal delivery was blocked. On the other hand, the factory storehouse is still inputting into the social storehouse continuously. In addition, considering that it coincides with the "Dragon Boat Festival short holiday", the actual working day is less than the normal weekly working day, and the accumulation of the social treasury is within the expectation.

The inventory in the plant was 3.4099 million tons, an increase of 226600 tons, + 7.1% month-on-month, and + 58.1% compared with the same period last year.

In addition to the weather and holiday factors, the decline of production enthusiasm of steel mills caused by shrinking profits of rebar production, and the slight decline in output of steel mills, especially electric arc furnace steel mills, is also one of the factors leading to the decline of factory depots.

 

Figure 1: an overview of the trend of threaded community library since 2016

 

 

Source: SMM

Figure 2: an overview of the trend of thread factory warehouse from 2016 to now

Source: SMM

In the demand side is still unable to let go, steady release of the moment, building materials inventory is difficult to be effectively digested in the short term, is expected to continue to maintain a tired state.

However, in the later period, the range of precipitation shrank rapidly in mid-to-late July, and the return of demand is just around the corner. On the other hand, the supply side will also show a downward trend-with the increase of plant pressure and the shrinking profits of rebar production, the operating rate of electric arc furnace steel mills may continue to decline, and blast furnace steel mills have also opened the operation of varieties such as threaded hot metal steering plate coils at a time when the profit difference between coils is widening.

Therefore, generally speaking, the short-term slump is not a "collapse", thread fundamentals will show a marginal improvement in late July, the market need not be too pessimistic.

Table 2: a list of the weather conditions in the country's mainstream cities in July

Weekly review
price forecast

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