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October is a rebound opportunity. Or is at the end of the battle? Holiday analysis!
Black market chaos around the Mid-Autumn Festival fell, in addition to the implementation of production restriction policy is not expected, there is still demand in the peak season has not started late; rising cycle is too short but lead to prices plummeting. With the arrival of the National Day holiday, what is the supply and demand situation of the market? What are the basis of trend judgement after the festival? Let's listen to what the analysts say.
Last week, the increase in steel inventories reduced market prices in panic. Current bullish and negative factors intertwined each other, after the festival mainly in the Tangshan area will enter the winter peak crossing limit, the supply side will shrink, and demand point of view, steel prices after pre-seasonal adjustment, the market in low-priced resources gradually increased, if the market demand after the festival warms up, steel prices will be There is a certain boost effect, in addition, in October, mid-October, the market pressure on capital will be eased compared with the end of September, but during the National Day, the market sales list will cause a certain accumulation of warehouse, inventory data is a big test. Therefore, a week after the holiday, steel prices will show a slight fall after the first fall.
The key point is that downstream demand for infrastructure is expected to be good in October. In the face of the downward pressure of macro-economy and the strengthening of investment stabilization policy, the government has indicated that it should actively play the role of financial guidance and take five measures to promote private investment. The next step in the field of transport infrastructure is to strive to start a new batch of major projects to ensure the follow-up financing of projects under construction. Infrastructure-related demand is expected to rebound in October, driven by policy-driven and pre-heating schedules. Stimulated by high profit margins, however, steel mills are also producing at a high rate, which could lead to less obvious demand growth relative to high supply. Therefore, after the National Day to pay attention to the accumulation of inventory, if inventory continues to rise, prices have a downside risk. After the holiday, we will focus on downstream construction site, inventory and environmental protection. If the inventory remains low, the construction site to speed up the rush period, environmental protection and production restrictions continue to strengthen, prices are still possible to pull up phases.
The ambitious steel traders in September were once again watered with cold water. It seems to have been the norm in these two years that the peak season is not strong and the slack season is not weak. But if we look back at the overall situation in September, the downturn is not without signs. If the NDRC's investigation into the steelmaking price spike is only sudden bad news, then the steelmaking price spike in July-August, the recovery of Tangshan's September start-up rate, the outbreak of Sino-US trade war on the impact of market mentality can be expected. In the end of September, when the spiral slump market panic, we do not have to be too pessimistic about the October market, from the domestic situation, October will soon start infrastructure, the government's trillion-dollar infrastructure plan will be the most important pillar to support the steel market demand, and production restrictions, although this year's "heating season" production limit is less than expected. However, small and medium-sized steel enterprises will still maintain a relatively high yield margin due to the low rate of environmental protection standards, and the remaining large steel enterprises are often the main force of stiffening prices; looking abroad, due to the derivative effect of 25% steel import tariffs introduced by the United States at the beginning of this year, Canada, the European Union, India have increased steel trade barriers in recent days, China's steel exports. The decline will be unavoidable, but considering that more than 90% of China's steel is now internally digested, the domestic steel needs to expand steadily is actually more than the export shrinkage brought by the negative. From all aspects of information, the probability of domestic steel prices stabilizing after the National Day is high, and steel prices may rebound slightly in the second half of the month as demand improves.
From the perspective of futures, the short trend of black varieties has been formed, but the subdivision of the trend of ore is different from the thread, the upward stage of the spiral ore with, the downward stage of the spiral ore stability.
On the one hand, the trend of threads is weaker than that of ores after the Ministry of Environmental Protection's declaration of banning environmental protection from landing and the cancellation of the 26-27 quota of urban production limits on iron and steel, non-ferrous building materials and other quantities in the draft "Comprehensive Air Pollution Control Plan for Autumn and Winter 2018-2019 in Beijing-Tianjin-Hebei and Its Peripheral Areas". On the contrary, a loosening of the environment means an increase in steel mill demand for the ore, which is why the ore took the lead in stabilizing the rebound before coke and coal.
On the other hand, the tightening of shipments in Australia's major mines in the third quarter and the increase in superimposed freight rates have increased the upside-down rate between forward resources and port spot. The price of forward resources often determines the Prussian pricing of the day, and because of the high cost of forward resources, some steelmakers have abandoned forward purchasing to port spot, allowing 160 million tons of storage. It has been rapidly digested to the current 1.45 million tons.
Last week, the increase in steel inventories reduced market prices in panic. Current bullish and negative factors intertwined each other, after the festival mainly in the Tangshan area will enter the winter peak crossing limit, the supply side will shrink, and demand point of view, steel prices after pre-seasonal adjustment, the market in low-priced resources gradually increased, if the market demand after the festival warms up, steel prices will be There is a certain boost effect, in addition, in October, mid-October, the market pressure on capital will be eased compared with the end of September, but during the National Day, the market sales list will cause a certain accumulation of warehouse, inventory data is a big test. Therefore, a week after the holiday, steel prices will show a slight fall after the first fall.
The key point is that downstream demand for infrastructure is expected to be good in October. In the face of the downward pressure of macro-economy and the strengthening of investment stabilization policy, the government has indicated that it should actively play the role of financial guidance and take five measures to promote private investment. The next step in the field of transport infrastructure is to strive to start a new batch of major projects to ensure the follow-up financing of projects under construction. Infrastructure-related demand is expected to rebound in October, driven by policy-driven and pre-heating schedules. Stimulated by high profit margins, however, steel mills are also producing at a high rate, which could lead to less obvious demand growth relative to high supply. Therefore, after the National Day to pay attention to the accumulation of inventory, if inventory continues to rise, prices have a downside risk. After the holiday, we will focus on downstream construction site, inventory and environmental protection. If the inventory remains low, the construction site to speed up the rush period, environmental protection and production restrictions continue to strengthen, prices are still possible to pull up phases.
The ambitious steel traders in September were once again watered with cold water. It seems to have been the norm in these two years that the peak season is not strong and the slack season is not weak. But if we look back at the overall situation in September, the downturn is not without signs. If the NDRC's investigation into the steelmaking price spike is only sudden bad news, then the steelmaking price spike in July-August, the recovery of Tangshan's September start-up rate, the outbreak of Sino-US trade war on the impact of market mentality can be expected. In the end of September, when the spiral slump market panic, we do not have to be too pessimistic about the October market, from the domestic situation, October will soon start infrastructure, the government's trillion-dollar infrastructure plan will be the most important pillar to support the steel market demand, and production restrictions, although this year's "heating season" production limit is less than expected. However, small and medium-sized steel enterprises will still maintain a relatively high yield margin due to the low rate of environmental protection standards, and the remaining large steel enterprises are often the main force of stiffening prices; looking abroad, due to the derivative effect of 25% steel import tariffs introduced by the United States at the beginning of this year, Canada, the European Union, India have increased steel trade barriers in recent days, China's steel exports. The decline will be unavoidable, but considering that more than 90% of China's steel is now internally digested, the domestic steel needs to expand steadily is actually more than the export shrinkage brought by the negative. From all aspects of information, the probability of domestic steel prices stabilizing after the National Day is high, and steel prices may rebound slightly in the second half of the month as demand improves.
From the perspective of futures, the short trend of black varieties has been formed, but the subdivision of the trend of ore is different from the thread, the upward stage of the spiral ore with, the downward stage of the spiral ore stability.
On the one hand, the trend of threads is weaker than that of ores after the Ministry of Environmental Protection's declaration of banning environmental protection from landing and the cancellation of the 26-27 quota of urban production limits on iron and steel, non-ferrous building materials and other quantities in the draft "Comprehensive Air Pollution Control Plan for Autumn and Winter 2018-2019 in Beijing-Tianjin-Hebei and Its Peripheral Areas". On the contrary, a loosening of the environment means an increase in steel mill demand for the ore, which is why the ore took the lead in stabilizing the rebound before coke and coal.
On the other hand, the tightening of shipments in Australia's major mines in the third quarter and the increase in superimposed freight rates have increased the upside-down rate between forward resources and port spot. The price of forward resources often determines the Prussian pricing of the day, and because of the high cost of forward resources, some steelmakers have abandoned forward purchasing to port spot, allowing 160 million tons of storage. It has been rapidly digested to the current 1.45 million tons.
