Home > News > Thread inventory does not rise or fall. What factors support the rise of steel prices?

Thread inventory does not rise or fall. What factors support the rise of steel prices?

First, the market review this week.

Steel market: This week, the spot market of steel is obviously divided, the prices of screw steel and wire rod have risen slightly, the main varieties of sheet metal have fallen, and the futures market is obviously weaker than the spot market.

In the spot market, the average price of rebar and wire rod rose 1.1% and 1.2% respectively this week, and Guangzhou market was the biggest, up 1.9% and 1.8% respectively. In terms of plate, other varieties were weaker except for a slightly stronger color coated plate.

In the futures market, the steel futures market this week is significantly weaker than the spot market, and the rebar is stronger than the hot coil. Among them, the main contract price of hot-rolled and rebar decreased by 1.8% and 1.2% respectively compared with last week. Futures contract contract widened to 199 yuan / ton.

Raw materials market:

The raw material spot market this week is obviously stronger than that of steel, and raw material futures are also weaker than spot goods.

In the spot market, the raw material spot market coke performance this week is the strongest, Tangshan secondary metallurgical coke spot price rose by 4.7%. Iron ore, scrap steel, billet also performed well, PB powder port spot, Zhangjiagang scrap steel, Tangshan billet prices rose by 2.6%, 2.5% and 0.8% respectively.

In the futures market, the main contract price of coke and coking coal has fallen this week. The main contract price of coke futures has fallen by 7% and coking coal by 1.4%. Iron ore futures are relatively strong, basically unchanged from last week's price.

Two, next week steel city trend forecast

This week, the trend of steel futures from strong to weak is obvious, spot by the impact of futures also from up to down, rebar, wire is still relatively strong, hot coil, cold rolling, plate is still relatively weak. Thursday afternoon, with the release of steel inventory data, the rebar did not go up, but down, and accelerated on Friday. Although spot goods continue to be supported by supply and demand fundamentals, the impact of steel futures on the macro side is increasing.

For next week's market, we believe that steel futures will be volatile, spot will be a slight decline. The condition that the board is weaker than the long material will continue. The reasons are as follows.

In terms of macro-environment, the latest macro-economic data released in the third quarter show that GDP fell 0.2 percentage points in the third quarter, macro-economic downward pressure is greater, although fixed asset investment has stabilized, but infrastructure investment is still declining, real estate investment has entered a small downward channel.

In recent years, the government has issued a number of favorable policies and measures to avoid the economic downturn. On Oct. 7, the central bank dropped its level unexpectedly, and then the government announced an increase in the proportion of tax rebates for some commodities exports, demanding that local special bonds be issued more quickly. Infrastructure projects and shanty reform schemes are also being accelerated. At the same time, the Ministry of finance also said that it is studying the implementation of a larger tax reduction policy. It is expected that the trend of demand decline will improve in the latter part of the year, infrastructure investment will rise from decline in October, and export will continue to grow as a result of the RMB exchange rate decline and tax rebate increase, which will support steel demand.

As far as steel supply is concerned, according to the latest statistics from the Bureau of Statistics, China's crude steel output in September was 8.85 million tons, an increase of 7.5% over the same period of last year, and the daily average output reached a new high. This shows that since the end of August, when the Ministry of Ecology and Environment issued a document to stop the implementation of a one-size-fits-all policy in peak staggering and limit production, the output limits have been relaxed and the ratio of steel supply has continued to rise Production restrictions were tightened in October, but crude steel production is expected to increase from September, but growth will slow.

Next week, due to poor air quality, Beijing Tianjin Hebei limited production will intensify. Tangshan City has issued Circular to continue to implement emergency emission reduction measures from 0:00 on October 19th. According to the latest scheme of Tangshan heating season production limit for enterprises, the productivity limit is slightly greater than expected. It can be seen that local governments at all levels dare not relax easily in the face of increasingly severe environmental pressure in northern winter. Entering the year November, the peak production restriction in the Yangtze River Delta and Beijing Tianjin Hebei will gradually increase. The supply chain ratio will drop.

From the inventory data, this week's total social stock of steel was 103.6 million tons, a decrease of 360,000 tons compared with last week's, and the stocks of thread steel and wire rod dropped by 6.4% and 7.1% respectively. However, the stocks of plate, hot rolled coil and cold rolled coil hardly changed, and the pressure of supply and demand of plate was significantly greater than that of building materials. (source: Zhi Gang)
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