Home » Steel · Supply and demand are lower than expected, steel prices have not yet come out of the shock|Thread_Sina Finance_Sina.com

Steel · Supply and demand are lower than expected, steel prices have not yet come out of the shock|Thread_Sina Finance_Sina.com

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Author | Chu Xinli China Securities Futures Industrial Product Analyst

· Summary·

Strategies for this issue:

Steel: 2305 contract 3900-4000 range to do more on dips.

From the perspective of steel fundamentals, the recovery of the building materials market after the Spring Festival is not as good as expected, whether it is supply or demand. The output of thread long process maintains a low output situation due to losses. In terms of apparent consumption, compared with the same period of the lunar calendar in previous years, the rebound in demand in this period is relatively low, and most construction sites have not yet resumed work after the festival. In terms of inventory, the threads have had a relatively large increase in the stockpile in the past two weeks, and the end point of the stockpile may have increased compared to last year. According to the conventional seasonality, we can gradually see destocking in late February.

Hot rollAt present, there is not much contradiction between supply and demand, but there are not enough bright spots in consumption, the downstream is cautious in purchasing goods, and the expectation of speculative consumption is not strong. At present, the economy continues to increase investment in infrastructure to hedge against the real estate recession, and there is little room for growth in manufacturing consumption. Under such expectations, the short-term upside of hot coil prices is relatively limited.

This week, the snail volume gap expanded slightly. European import quotas were released in January, but some steel mills in Turkey stopped production due to the earthquake. Currently, the supply in Europe is tight. The market reflects that the recent HRC export profits are better than domestic sales (export transaction prices are higher than domestic trade by 100-200 yuan ton), export orders The situation is good, and the increase in export orders for hot coils has led to a widening of the coil gap. However, exports are difficult to sustain for a long time, and there is limited space for the expansion of screw volume.

Looking forward to the market outlook, short-term demand continues to improve, and steel prices are partially released after the rise and fall of steel prices. And the policy before the two sessions is expected to always exist, and steel prices are still supported. There will be a lot of important data next week, so you can wait for the callback to do more, and pay attention to the 3900-4000 range.

Uncertainties:

Overseas interest rate hike cycle, the pace of domestic economic recovery

1. Thread

1.1 This week’s spot market performance: building materials have mixed ups and downs, and hot coils have generally risen

1.2 Thread supply: Resume work in short processes, keep low operating hours in long processes

This week, thread production increased slightly, and short-process enterprises resumed production faster. Some long-process enterprises implemented a plan to stop and resume production after the festival, resulting in a decline in the operating rate of long-processes. It is expected that the number of enterprises resuming production will continue to increase next week, but due to poor profits, the increase in production is limited. Mysteel weekly data shows that as of February 10, the weekly output of threads was 2.4611 million tons, an increase of 112,100 tons from the previous month. From the perspective of technology, the output of long process this week was 2,335,100 tons, an increase of 5,100 tons from the previous month, and the output of short process was 126,000 tons, an increase of 107,000 tons from the previous month. In this period, the operating rate of long-term processes was 48.62%, and that of short-term processes was 21.84%.

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From the perspective of profit, the long and short process profits of steel mills returned to losses this week. At present, the long process losses are 50-100 yuan/ton, and the short process profit losses are 50-100 yuan/ton. The profit rate of steel mills is 38.53%. Most steel mills are still losing money in production, and the drive to resume production and increase production is insufficient.

1.3 Thread table needs: pay attention to the downstream rework process

In terms of apparent consumption, the demand for threaded watches this week was 1.3627 million tons, an increase of 533,200 tons from the previous month. Compared with the same period of the lunar calendar in previous years, the recovery of meter demand in this period is relatively low, and most construction sites have not yet resumed work after the festival. According to the century-old construction survey, as of February 7, the national construction enterprise resumption rate was 38.4%, an increase of 27.9 percentage points from the previous period, and a decrease of 12.6 percentage points from last year (the 17th day of the first lunar month); the labor service delivery rate was 43.3%, an increase of 28.6% from the previous period percentage points, a year-on-year decrease of 16.9 percentage points. At present, the transaction in the building materials market is in the stage of recovery and recovery, but the recovery speed is relatively slow. The resumption of work at the downstream construction site is slow, and the rain in East China is superimposed, and the actual demand needs more time to verify.

1.4 Thread inventory: The inventory cycle is expected to be shortened

As of February 10,RebarThe total inventory was 12.2317 million tons, an increase of 1.0984 million tons from the previous month. The current total inventory level is slightly higher than the same period last year. In terms of sub-links, the thread bank is at a high level compared with previous years, and the inventory of steel mills is close to the historical level of the same period. In the current period, the social warehouse is 884.82 tons, the chain warehouse is 899,000 tons, the factory warehouse is 3.3835 million tons, and the chain warehouse is 199,400 tons. In the past two weeks, the social bank base has been relatively large, and the end point of the social bank may have increased compared to last year. According to the conventional seasonality, we can gradually see destocking in late February.

two,Hot roll

2.1 Supply and demand of hot coil: the supply and demand are basically the same, and there is little contradiction

On the supply side, Mysteel’s weekly data shows that as of February 10, the weekly output of hot coils was 3.0815 million tons, an increase of 21,100 tons from the previous month, and has continued to rise slightly recently. On the demand side, 3.0701 million tons of hot coil watches are needed, an increase of 377,200 tons from the previous month. In this period, the supply and demand are basically flat, and the total inventory is flat. At present, there is not much contradiction between the supply and demand of hot coil, but the bright spot of consumption is insufficient, the downstream purchases cautiously, and the expectation of speculative consumption is not strong. At present, the economy continues to increase investment in infrastructure to hedge against the real estate recession, and there is little room for growth in manufacturing consumption. Under such expectations, the short-term upside of hot coil prices is relatively limited.

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2.2 Hot coil inventory: approaching the high point of inventory

As of February 10, 11,400 tons to 4,049,200 tons of hot coils have been stored this week, of which 19,500 tons to 3,130,400 tons have been stored in corporate warehouses, and 8,100 tons to 918,800 tons have been removed from factory warehouses. At present, the total inventory level of hot coils has risen to the highest level in the same period of history. At present, the supply and demand of hot coils are basically flat, and the pressure on stockpiles is not great.

2.3 Steel Summary:

On the macro level, the central bank released social financing and credit data for January. The data showed that social financing increased by 5.98 trillion yuan in January, and the stock of social financing increased by 9.4%, which was -0.2% from the previous value (the previous value was 9.6%). Structurally, corporate medium- and long-term loans maintained high growth, rising by 0.6 percentage points from the previous month to 10.6%. However, the recovery momentum of residential loans was interrupted. Residential medium- and long-term loans increased by only 223.1 billion yuan, a decrease of 519.3 billion yuan year-on-year . The scale of corporate bond financing increased by 148.6 billion yuan, a year-on-year decrease of -435.2 billion yuan, and government debt increased by 414 billion yuan, a year-on-year decrease of -188.6 billion yuan, which is the main drag on social financing. In January, there was an obvious disparity between credit residents and enterprises. The core difference lies in real estate. There is still no consensus on when real estate investment will bottom out and rebound. The data tracked by Kerui Real Estate shows that the short-term market does show some signs of heating up, whether it is from the recovery of transactions, project visits, rising subscriptions, and withdrawal of discounts, etc., but one should not hold too much on the current hot sales of individual projects. Optimistic expectations, whether the heat can continue remains to be seen. On the one hand, according to historical laws, due to returning home for the Spring Festival, there will basically be a round of demand release after the year; on the other hand, the full unbundling of the epidemic will also release part of the demand for compensatory housing purchases. Judging from the current hot-selling projects, they are mainly concentrated in the core areas of the first and second tiers and the strong third tiers.

Today, the current downward cycle of real estate has lasted for about a year, and the growth rates of real estate investment, sales, prices, and three-work area are all in the decline range. At present, the current economy continues to increase investment in infrastructure to hedge against the real estate recession, and there is little room for growth in manufacturing consumption. According to incomplete statistics from Mysteel, in January 2023, a total of 11,635 projects were started across the country, a month-on-month increase of 189.5%; the total investment was about 9,381.92 billion yuan, a month-on-month increase of 243.7%, and a year-on-year increase of 93.0%.

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From the perspective of steel fundamentals, the recovery of the building materials market after the Spring Festival is not as good as expected, whether it is supply or demand. The output of thread long process maintains a low output situation due to losses. In terms of apparent consumption, compared with the same period of the lunar calendar in previous years, the rebound in demand in this period is relatively low, and most construction sites have not yet resumed work after the festival. In terms of inventory, the threads have had a relatively large increase in the stockpile in the past two weeks, and the end point of the stockpile may have increased compared to last year. According to the conventional seasonality, we can gradually see destocking in late February. At present, there is not much contradiction between the supply and demand of hot coil, but the bright spot of consumption is insufficient, the downstream purchases cautiously, and the expectation of speculative consumption is not strong. At present, the economy continues to increase investment in infrastructure to hedge against the real estate recession, and there is little room for growth in manufacturing consumption. Under such expectations, the short-term upside of hot coil prices is relatively limited.

This week, the snail volume gap expanded slightly. European import quotas were released in January, but some steel mills in Turkey stopped production due to the earthquake. Currently, the supply in Europe is tight. The market reflects that the recent HRC export profits are better than domestic sales (export transaction prices are 100-200 yuan higher than domestic trade), export orders The situation is good, and the increase in export orders for hot coils has led to a widening of the coil gap. However, exports are difficult to sustain for a long time, and there is limited space for the expansion of screw volume.

Looking forward to the market outlook, short-term demand continues to improve, and steel prices are partially released after the rise and fall of steel prices. And the policy before the two sessions is expected to always exist, and steel prices are still supported. There will be a lot of important data next week, so you can wait for the callback to do more, and pay attention to the 3900-4000 range.

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