The rise in the monthly level of black is not over yet?

Last year, black futures varieties all walked out of a wave of sharp rise. The shortage of raw materials has pushed up costs strongly, coupled with an improvement in demand for finished wood, which has led to new highs in recent years. Since the beginning of this year, the demand for finished materials has weakened, while steel mills replenish the stock, traders store in winter, and the market price trend is relatively tangled.

Take a long view, the rise of the monthly level of the black department is not over, but at present, the pattern of supply and demand has changed, and prices show a trend of rising and falling. In addition, it is expected that the adjustment market will be carried out in two stages: the first stage is the compression of spot profits, that is, the finished wood is weak while the raw materials are strong, from late December last year to mid-January this year; the second stage is the decline in the price of raw materials, which creates space for the further decline of finished wood, that is, the decline of finished wood driven weakly by raw materials, from mid-January to the first and middle of March.

At present, the market is still in the first stage, that is, the timber profit compression stage. At this time, the corresponding is that the finished material changes from the period of removing the library to the cycle of accumulating the library. As of Tuesday, the total inventory of rebar has increased for two consecutive weeks, and the hot coil has officially entered the accumulation cycle. Specifically, the spot price peak of this round appeared on December 21 last year, when the spot prices of Shanghai rebar and hot coil reached 4660 yuan / ton and 4700 yuan / ton respectively. As of January 12 this year, their prices have fallen by 280 yuan / ton and 400 yuan / ton respectively, and the corresponding spot profits have shrunk by 365 yuan / ton and 485 yuan / ton respectively. The compression of profits is caused by the decline in the price of finished materials and the rise in the price of raw materials. For example, the plate price of Taiyuan first-class metallurgical coke car has increased by 250 yuan / ton in the same period, while the price of Qingdao, Hong Kong, Macao and New Zealand powder (62.5%) has only been slightly reduced.

The pressure on the inventory end of steel mills can be seen from the delivery of the contract in January. On the one hand, the absolute price is high this year, traders are not willing to take the initiative to store in winter, and some steel mills are limited by storage capacity, so they are forced to find another warehouse for winter storage; on the other hand, with the weakening of downstream demand, steel mill inventory needs to be released. Plate price is higher, delivery can alleviate the inventory pressure of steel mills to a certain extent. Specifically, on January 12, the rebar warehouse order volume was 53000 tons, and the hot coil warehouse order volume was 157000 tons, both significantly higher than the same period last year. Under this influence, the price difference between January contract and May contract shrank obviously, and the rebar market price difference was once-200 yuan / ton.

With the weakening of demand for finished products, the fundamentals of raw materials will also change, which will drive the whole black system into the second stage of callback. In the recent week, the supply of iron ore has decreased, the demand for replenishment in steel mills has remained high, the industrial pattern is relatively healthy, and spot prices are still strong. However, the inventory cycle model shows that iron ore has entered the weak accumulation cycle, which is bound to restrain the rise of spot prices. At the same time, the coke inventory cycle model shows that it is in the destocking cycle, and the spot price of coke is relatively strong. However, under the influence of sentiment, futures will start a pullback ahead of the spot.

In the long run, it can be expected that the amount of steel used in various industries will increase in varying degrees this year, which is determined by the current macro environment. On the one hand, monetary policy in the United States and Europe remains loose; on the other hand, the economies of the world's major economies will continue to recover and are expected to grow by 5%, of which China's economic growth is expected to reach 9%. In addition, iron ore fundamentals will maintain a preference this year, and coke still faces problems such as accelerating the elimination of backward production capacity and untimely production of new production capacity. As a result, this year's rally will be driven by rising costs and profit expansion, which may peak in May-July. However, in the short term, the pressure of finished wood inventory is increasing and there is a risk that the stock will continue to accumulate, and raw materials may also be weakened under the drag of finished wood, and prices will inevitably be adjusted back from January to March.