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There is no obvious increase in the demand for more than half of the demand for "Jinjiu". What is the direction of the steel market?
Sep 16,2020 09:03CST
translation
Source:Futures daily
The content below was translated by Tencent automatically for reference.

SMM network news: last week, the national snail market prices fell slightly, the overall decline of 10 Mustang 30 yuan / ton. At the beginning of last week, the snail fluctuated and fell all the way, dealing a blow to the confidence of manufacturers, coupled with lower-than-expected demand, high social inventories and continuous negative falls in prices. Near the end of last week, the snail has come out of the Wulianyin big dive, with a cumulative decline of more than 100 yuan / ton. "Golden Nine" is about to be more than halfway, after the last week of decline adjustment, this week rebar period is ushered in a rebound in the market.

At the beginning of this year, affected by the epidemic, the pace of demand in the steel market was disrupted, inventories reached a record high, the pressure on the domestic steel market was heavy, and there were two obvious pullbacks in prices. Since the beginning of the second quarter, the national policy level has strongly promoted the resumption of work and production, the demand for rebar broke out, inventory dropped rapidly, and monetary policy and fiscal policy continued to increase, rebar prices all the way up, basically returning to the level at the end of last year.

Zhao Yongjun, a researcher from the black department of CITIC Construction Investment Futures, told Futures Daily that macro expectations were upward, market risk appetite continued to pick up, and demand fell significantly in the third quarter affected by the rainy season, but the market had strong expectations for the "Golden Nine Silver Ten" peak season, and rebar prices rose steadily. Reviewing the rebar market this year, high inventory and low profit have become the main characteristics.

"since September, steel production has been at the highest level in the same period in history, but sales are basically the same as last year, which is also an important reason for the recent decline in steel prices." Zhao Yongjun said that from a regional point of view, the year-on-year increase in production in Southwest China, East China and South China was significantly higher than that in other regions, and sales performance was weak. Affected by the production restrictions in Tangshan, the output in North China has declined significantly, and the recent transaction has improved, especially in Xiongan area, but the sales volume has not yet reached the level of the second quarter, and the production and marketing situation in other areas is relatively mild.

Hou Jiwei, an analyst at Jinlian Chuang Steel, told Futures Daily that September is the traditional peak demand season, and the sharp fall in the futures market last week did not break the confidence of traders, and the number of people bullish on the steel market increased this week. Although steel traders are more optimistic about the future, some people think that the current inventory pressure can not be underestimated, the short-term rising space is relatively limited, it is expected that this week's increase is less than 30 yuan / ton.

According to relevant statistics, there are 12 production line maintenance plans at present, involving 11 steel mills and more than 20 production lines, which are expected to affect the output of finished products of about 46150 tons per day. At present, there are 7 blast furnace maintenance plans, involving 7 steel mills and 9 blast furnaces, which are expected to affect the output of hot metal of about 36800 tons per day, of which 2 are being overhauled, 4 are completed and 1 new. The number of new overhaul steel mills in this period continues to decrease compared with the previous period, the overall operating rate of blast furnaces and rolling lines throughout the country continues to remain high, and the production enthusiasm of steel mills is generally high. After entering the peak season of traditional consumption in September, market expectations for the future are generally strong, transactions in some areas are significantly better than the previous period, and the price support of raw materials is still obvious, so steel mills are less willing to overhaul at this time.

Jinlianchuang analysis believes that in the short term, even if the profits are not high, the production enthusiasm of steel mills will not be reduced, and it is expected that the number of overhaul in the next phase of steel mills will still be small, and at the same time, the maintenance time of the new overhaul steel mills will not be long, and the scale of overhaul will not be too large.

"judging from the regional changes, the inventory pressure in the western and southern regions has slowed down this week, the demand has slightly increased, the output has rebounded, and the social treasury has been removed; while the slow start of demand in East China, North China, and Northeast China, coupled with the increase in the steel mill resource transfer market, inventory has accumulated. In the later stage, as the national high temperature weather recedes, the rush pressure will be transformed into steel demand, and the peak season demand is expected to be gradually realized. " Hou Jiwei believes that from the inventory data, the steel market has entered the start period of the peak season this week, and production has peaked and fallen, indicating that the downstream terminal site is cautious in stock preparation, but the demand has not yet been significantly released, and it is comprehensively expected that the next period of inventory may still show a slight decline.

Some market participants believe that, as far as the national iron and steel enterprises are concerned, although the steel profits are relatively low this year, but most of them make money, and the loss time is relatively short. In terms of varieties, the profit of plate-based steel mills is better than that of long-steel mills, and the profit of long-process steel mills is better than that of short-process steel mills, but the profit gap between long-and short-process steel mills is obviously lower than that of previous years, and private steel mills are better than state-owned enterprises.

Zhao Yongjun believes that from the perspective of the rest of this year, the downward pressure on the steel market is still relatively great, mainly for two reasons: first, the current inventory level is still very high, and the remaining time of this year is only three and a half months, and the supply pressure is relatively large; second, the uncertainty of the epidemic situation in autumn and winter is relatively large, and the epidemic situation in Europe has been showing signs of a second rise recently.

"the downstream main body of domestic steel is a personnel-intensive industry. With the advent of winter, there is a great uncertainty about whether there will be an early holiday to reduce personnel flow and contact, but there are also great differences in the current price rhythm market. On the one hand, judging from the period before September, the risk of a sluggish peak season of "Golden Nine and Silver Ten" is relatively large, and if follow-up demand never breaks out, subsequent prices may mainly be callbacks; on the other hand, there is no substantial tightening macroscopically at present, and the possibility of subsequent steel demand picking up is higher, and prices should rise again. Even if demand picks up, it is difficult to exceed the height of the second quarter, and the price peak is limited. " Zhao Yongjun said.

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