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During The Spring Festival, The Price Of Steel Stock Rises Obviously Later Or Under Pressure

Feb 27, 2018

Although the Spring Festival holiday has ended, but according to the "Securities daily" reporter understand that during the Spring Festival, due to the downstream site basic shutdown, steel demand deserted, close to zero, the spot market shows a price without the pattern of the city. Statistics show that as of February 21, the national average price of 20mm rebar is 4134 yuan/ton, flat before the section.


However, from the inventory point of view, the national 35 major cities of rebar stock estimated total of 8.106 million tons, more than 1.895 million tons before the section, wire inventory of 2.925 million tons, more than 999,000 tons before the section. And from the recent three years of social inventory changes, the 2018 increase in the first place, of which the inventory of long materials increased by 35.56%, hot-rolled and medium-thick plate inventory (steel mills Inventory + social inventory) is estimated at 5.61 million tons, up to 30% more than the preceding section.


The price of stock rising is not clear


Data show that, as of February 9, there are institutions to investigate the 163 steel mills BF Capacity utilization rate of 72.42%, eliminate the utilization of the production capacity of 78.59%, compared to the peak before the limit, there are still 12% to 13% of the decline, that is, the environmental protection production still imposes strict restrictions on the overall supply. Moreover, in February, some areas of north China Haze still serious, limiting the restrictions again. and Tangshan in order to remove the air quality "ten" hat, intends to be limited to "normal", "precision". Supply tightening has further underpinned price formation and strengthened traders ' confidence.


The above data mentioned the rise in steel stocks, the review of 2017 years, the final rapid steel rod of steel stocks, is due to the crackdown on "ground", resulting in the April steel supply and demand there is a clear gap. Although this year has nearly one months of steel mills, demand recovery mismatch, but the current level of inventory accumulation theoretically enough to fill the gap between supply and demand. Then the steel production will lead to a rebound in supply, therefore, in this expectation, steel prices are still facing great pressure.


At the same time, real estate investment in the end of 2017 has seen a noticeable decline, this year will continue this trend. With the financial lever, the interest rate to maintain high, a lot of home purchase loan interest rate rises, therefore, the 2018 commercial housing sales end is not optimistic. But the infrastructure is suppressed by the regulation policy, will also have the obvious weakening, especially the policy to the local illegal financing inspection is strict, the PPP project inventory faces the liquidation reorganization, the infrastructure investment will be further hit. Therefore, the weakening of investment in real estate infrastructure will also weigh on the demand for construction steel.


Combined with the above, it is estimated that by the end of March the overall inventory probability has increased to a level similar to that of last year. Although after a period of end demand recovery of the initial superposition of production, inventory has phased accelerated downward expectations, supporting steel prices and profit rebound, but after March will face a resumption of pressure, so the current inventory pressure is more alarming. In addition, the long-term risk of slowing the growth of terminal investment cannot be overlooked.


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