Pay attention to the price performance of raw materials
At present, the winter storage policy and price level of steel products in 2022 and the expected demand height after the Spring Festival in 2023 are not ideal.existRebarUnder the background that social inventory has risen to a high level in the same period of the previous year, the pressure on fundamentals has increased marginally.
Since November 2022, driven by the strong expectations brought about by the release of macroeconomic and stability maintenance measures in the real estate industry, the optimization of epidemic prevention and control policies in many places, and the firmness of raw material prices, steel futures and spot prices have bottomed out and rebounded overall. The game between weak demand and strong expectations also makes the basis show a weak performance most of the time.
The volume and price of the real estate market will stabilize
In 2022, the performance of the three major demand terminals from weak to strong is real estate, manufacturing and infrastructure. Among them, the most obvious deviation between policy and reality is real estate. On January 5, 2023, after the release of the first set of dynamic adjustment mechanism for housing loan interest rate policy, the entire real estate policy basically presents the phenomenon of maintaining housing stability, such as guaranteeing the delivery of buildings, promoting consumption, and stabilizing housing prices. It is time for housing prices to stabilize and the chain of new starts to recover. In 2023, as the key year for the implementation of the policy to produce real effects on the guaranteed delivery buildings, the expected recovery of real estate demand is relatively clear. Judging from the performance of the real estate cycle and leading indicators, if there is no new round of surge in the number of infections in the first quarter of 2023, the new start of construction in the second quarter is expected to stabilize marginally, and it is expected to recover in the third quarter. Therefore, the second and third quarters can initially be considered as a stage with strong support for steel prices.
The administrative restrictions on steel production in 2022 are mainly concentrated in the first quarter and the fourth quarter, and most of the other times show phased adjustments with the profit situation. It is estimated that the output of crude steel in 2022 will be about 1.01 billion tons, which is about 2.6% lower than that in 2021. The main line of reducing crude steel production continued smoothly. At present, the profit center of gravity of the iron and steel industry is still at a low level, and the asset-liability ratio of the ferrous metal smelting and rolling processing industry chain remains high. As the Spring Festival is approaching, under the background of increased suspension of production and maintenance of steel mills, steel supply and demand will continue to maintain a cyclical downward trend, and the year-on-year growth rate difference between rebar production and sales will remain above the zero axis. Large, and there is a certain degree of difficulty in mitigation. Under the main line of stable growth in 2023, the possibility of large-scale production reduction by steel enterprises is relatively limited. If the steel industry chain wants to achieve sustainable and healthy development, it needs resource matching, coordinated recovery of supply and demand, and a controllable balance of industrial profits. The staged recovery of corporate profits requires both the recovery of demand and the continued implementation of measures to ensure the supply of raw materials. Therefore, the recovery of steel supply will eventually be based on the adaptation of demand.
Stock driver enters repair mode
At present, the winter storage policy and price level of steel products in 2022 and the expected demand height after the Spring Festival in 2023 are not ideal. In addition, the winter storage cycle is about two months shorter than the previous year, and the social inventory of rebar has risen to the previous year. Against the background of high levels in the same period, it is expected that after the Spring Festival in 2023, the pressure on the inventory side may increase slightly compared with the high point in 2022. It is estimated through deduction that the high point of inventory in 2023 will be around 14.8 million tons, which is lower than the midstream level of the high point in the same period of previous years. Among them, it should be noted that the long-term deviation between the social inventory change rate and steel price is unsustainable. Referring to the empirical law of return after multiple deviations from the fourth quarter of 2018 to the first quarter of 2020, there is a high probability that the first half of 2023 will enter Returning to the repair stage, the short-term margin of inventory pressure puts pressure on steel prices.
Overall, rebar basically presents a phased peaking pattern. Macro expectations will eventually return to the logic of the industry, which has now entered a transition period, and the pressure on fundamentals has increased marginally. It is expected that the performance of raw material prices before the Spring Festival may become the core, and whether it is firm or not will determine the strength of steel prices in the off-season in January. (Author unit: Haitong Futures Source: Futures Daily)
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