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[SMM analysis] anticipation of failure, panic, regenerated rebar stepping into weak concussion.
Sep 16,2020 14:29CST
The content below was translated by Tencent automatically for reference.

SMM9 March 16: the recent poor performance of the thread market is far from expected. Spot market, the price of the national snail market fell continuously last week, falling by about 30 yuan / ton as a whole. The futures market also fluctuated and fell all the way, coupled with high social inventories and continuous negative falls in prices.


The real estate data failed, and the market mood was affected. Investment in real estate development rose 4.6 per cent from January to August compared with the same period last year, 1.2 percentage points faster than in January-July, according to the Bureau of Statistics yesterday. Of this total, residential investment increased by 5.3%, an increase of 1.2 percentage points. The funds of real estate development enterprises increased by 3.0%, and the growth rate accelerated by 2.2 percentage points. However, the area of new housing starts by real estate developers fell by 3.6%. The sales area of commercial housing nationwide was 984.86 million square meters, down 3.3% from the same period last year. Affected by the lower-than-expected real estate data, the black department fell sharply again yesterday.

Steel inventory deceleration is slow, high supply and high inventory cause concern. According to SMM data, as of September 10, the country's total inventory of building materials was 11.4883 million tons, with a month-on-month ratio of-0.7% and + 49.4% from the same period last year. The market has been looking forward to the peak season for a long time, the explosive power of this year seems to be unsatisfactory, and the speed of reducing the stock is far less than the market expected. Among them, the social inventory was 8.1178 million tons, an increase of 29900 tons, + 47.8% compared with the same period last year, and + 0.4% compared with the previous year. Recently, the situation of stock reduction is relatively general, the contradiction between supply and demand continues to ferment, and the pressure of price pullback is greater.

The spot transaction of thread is deserted. According to SMM, yesterday, as the data of the Bureau of Statistics failed to meet the market's "peak season" expectations-crude steel and steel production continued to grow, the year-on-year growth rate of real estate and fixed investment was still negative. The expected "Bubble" was punctured, and the period screw immediately dived "demonstration". The spot market then fell, the mainstream market fell 10-30 yuan / ton, and the trading atmosphere was deserted. The panic suppressed a few days ago has begun to spread again, and the performance of the spot market is still relatively lacklustre today.

Overall, the "Golden Nine Silver Ten" peak season is relatively high risk, if the follow-up demand can not break out, the follow-up prices may be mainly a pullback. At present, it is expected that there will be some falsification of demand, coupled with the tightening of urban real estate, and compared with the first half of the year, the north will enter the heating season in mid-late November, the suppression of terminal demand will appear again, and it will be more difficult to go to the warehouse. However, in the short term, steel prices may be dominated by weak shocks. After all, cost support is still in place, cement shipments are rising, digging machine sales hit a new high in the same period, and fundamentals still have support. In the future, we will focus on the change of production and whether the inventory can decline effectively.

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