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The performance of the black department attracts attention again! Will "Golden Nine and Silver Ten" still come?
Sep 1,2020 08:57CST
translation
Source:Futures daily
The content below was translated by Tencent automatically for reference.

SMM News: since the second quarter, the domestic steel market as a whole shows a prosperous pattern of supply and demand, the focus of spot prices has shifted upward, but raw material prices are also rising, gross margin per ton of steel continues to narrow. Market participants believe that the late rebar prices will be dominated by oscillatory operation, so it is very important to grasp the fundamental rhythm of supply and demand.

"prosperous supply and demand, high inventory and low profits are the most important features of the steel market at present." Zhang Shaoda, a steel researcher at CITIC Construction Investment Futures, said that since the second quarter, driven by proactive fiscal policy, steel demand terminals have entered a substantial rush stage, and steel consumption has been stable at a high level for a long time. The improvement on the demand side has led to a slow rise in prices. At the same time, the production capacity of steel mills has also been fully released, superimposed by the suppression of high inventory, and the profit level has declined.

"the rise in steel prices in the second quarter comes more from the support of terminal demand, and a large part of the driving force since the third quarter comes from costs and expectations of a better economy in the later period. Loose liquidity has provided strong support to steel prices, and this momentum has continued until now. " The steel researcher said.

It is worth noting that the rising price of iron ore provides the most basic cost support for steel prices from the cost of raw materials. "on the whole, although most terminal enterprises are still facing difficulties such as insufficient orders, the recovery is more obvious than in the previous few months, the demand side of 'Jinjiu Silver 10' will be further improved, and steel prices will continue to oscillate strongly." Xu Haibin said.

Recently, iron ore rose by a large margin, which once again attracted the attention of investors. Market participants believe that since the epidemic, mine production reduction has become the biggest speculation point of this round of iron ore rise. Guosheng Futures said that this round of rise is mainly due to the periodic tight supply of medium-grade mineral powder in the port and the large short offer of contracts in recent months. The spot supply and demand pattern has shifted since the end of June, with the total inventory of pressurized ports in 45 ports across the country increasing by about 22 million tons from the end of June to the end of August. In this case, the tight supply of middle-grade mineral powder is due to the epidemic situation, weather and other causes that the ship was not unloaded in time and the holding warehouse temporarily locked the middle-grade mineral powder. with the end of the contract in recent months, the difficulties in delivery are temporarily relieved, and at the same time, the problem of pressing port is given time to solve, which is expected to make the market return to the fundamentals of supply and demand. The supply and demand pattern has accumulated inventories at the level of 24.62 million tons (45 ports) of weekly arrival and 94 per cent capacity utilization of steel mills since the end of June. According to the seasonal fourth quarter iron ore supply is expected to continue to increase from the previous quarter, while the high operating rate of 94 per cent of steel mills is not sustainable, it can be speculated that iron ore accumulation will accelerate in the later period, and the pattern of iron ore supply surplus will be more significant, thus putting pressure on spot and 2101 contract prices.

Futures Daily reporter found that August rebar inventory and table performance is significantly weaker than the market expected, high temperature and Rain Water weather led to the delayed release of demand, a certain blow to market confidence. Real estate and infrastructure data showed a bright performance in July, with fiscal expenditure growing at 18.5% year-on-year in July, the highest monthly growth rate since 2019, making the market still have strong expectations for the upcoming "Golden Nine" traditional consumption season. it is difficult to falsify the expectation of strong market demand. While the iron ore at the raw material end continues to rise under strong policy pressure, the second round of coke rise opens, and the scrap price rises highly. at present, the spot profit of the long-process steel plant has turned negative, the electric furnace steel plant is in a loss situation, and some steel mills have increased their overhaul, which makes the thread cost support significantly enhanced. "the rebar plate weakened somewhat in the second half of August, but the spot price performance was strong, especially at the end of the month, driven by tighter production restrictions in Tangshan, the spot price rose sharply, and the impact of spot performance on the disk surface changed from a drag on the previous stage to a boost. It is expected that the thread disk will oscillate upward in September." Everbright Futures Shuangjiao researcher Wang Xintong told reporters.

It is understood that in terms of coking coal supply, the start-up of domestic coal mines at the domestic end is stable, the impact of coal mine accidents in Shandong is weakened, and the supply at the domestic end is basically stable. With the downstream replenishment, the inventory pressure of coal mine decreases. The customs clearance of Australian coal at the import end is still strict, the customs clearance time is longer, and the import volume of Australian coal is reduced. At the same time, recently, with Mongolian drivers allowed to spend the night in China, the average daily clearance at Ganqimudu Port is more than 1000 vehicles, with a maximum of 1492 vehicles recently. At the same time, after the increase in the number of customs vehicles, the price of Mongolian coal fell. In the later stage, the import of Australian coal may be reduced, while the import of Mongolian coal will increase. On the demand side, the high level of start-up of coking plants continues to rise, and the demand for coking coal is exuberant. Inventory, as the coking operation rate continues to rise, downstream steel coking plant coking coal replenishment, inventory slightly increased. Customs clearance reduced port inventory decline.

The operating rate of coking plant continues to rise at a high level, and the supply of coke is high. On the demand side, the profits of steel mills are shrinking, at the same time, the production of blast furnace is expected to be limited, the operating rate of blast furnace is lower than the previous month, and the output In terms of inventory, the inventory of steel mills is basically stable, while that of coking plants remains low. Due to the decrease in water volume under the influence of the weather, port inventories continued to rise slightly. In the later stage, the short-term steel plant is still expected to have limited production, but the coke supply end capacity is uncertain, which has a great disturbance to the coke supply.

In Wang Xintong's view, the trend of the black department in the later period still depends on the demand, and there are still strong expectations in the peak season of traditional consumption of "Golden Nine Silver Ten".

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