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[SMM hot volume] when will the spot price of "slow" in the hot volume library "put aside the clouds and see the light of day"?
Jul 30,2020 17:20CST
The content below was translated by Tencent automatically for reference.

According to SMM Steel, the total inventory of hot-rolled coil this week is 3.8831 million tons, with a month-on-month ratio of + 0.72% and a year-on-year ratio of + 12%. The overall growth rate has slowed down from the previous month, and the year-on-year growth rate has also declined. The current inventory pressure is OK, and the short-term disturbance to fundamentals is relatively limited.

Table 1: comparison of hot rolling inventory

Source: SMM Steel


Social inventory: 2.7609 million tons of hot rolling stock this week, with a month-on-month ratio of + 1.57% and a year-on-year ratio of + 9.9%. Recently, the spot prices in various markets are mainly high and volatile, the market trading atmosphere is bleak, the overall merchant shipments are not smooth, and the actual digested inventory of the terminal is relatively limited. The superimposed steel plant accelerates the speed of transferring the plant warehouse to the social warehouse, and the market arrival volume increases, so as a whole, it leads to the continuous accumulation of the social warehouse, and the extent of the accumulation is enlarged.

Figure 1: social inventory trend chart

Source: SMM Steel

Steel mill inventory: this week's hot rolling mill warehouse 1.1222 million tons, month-on-month-1.31%, + 17.52% compared with the same period last year. Recently, affected by the flood, the production of some steel mills has been affected to a certain extent. Superimposed on the new maintenance of individual steel mills, the output of hot coil this week has declined compared with the previous period. At the same time, the pace of the transfer of the steel factory warehouse to the social warehouse has accelerated, so it has jointly led to the increase and decline of the factory warehouse this week.

Figure 2: inventory trend chart of steel mills

Source: SMM Steel

Generally speaking, the accumulation speed of hot rolls is relatively slow in the near future. Steel mills almost no inventory pressure, strong willingness to raise prices. The short-term inventory pressure in the market is not obvious, but due to the continuous suppression of terminal demand, the willingness to raise prices is weaker than in the previous period, and some merchants with high inventory are mainly shipping, which leads to the weakness of the current spot prices. However, it is worth noting that the fundamentals of the short-term hot volume spot market are OK, and the bottom of the stack is supported by raw materials, so it is expected that even if the rise is weak, a deep pullback is also more difficult in the short term, probably maintaining a volatile weak pattern.




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