Due to continuous rains over the past few days, in the past week, the balance of the domestic steel market has been broken for one month, the major varieties have fallen across the board, and the overall decline has intensified. The cumulative decline in local areas has been close to one hundred yuan, which is generally in line with previous expectations.
It is understood that the National Bureau of Statistics announced that economic data in May showed a slowdown in economic growth and severe inflation. In order to curb inflation, the central bank announced that it raised the deposit reserve ratio on the day of data release. Concerns about the international debt crisis in Europe continued, stock indexes and commodities continued to fall. The Dow fell below the key support point of 12,000, and crude oil fell below 95 US dollars.
At the same time, the operating rate of steel mills was high. In the first half of June, the daily output of crude steel increased by 2.7% from the previous month. In May, the average daily average crude steel production in the country was 1.94 million tons, which was slightly lower than that in April, but average daily average steel in early June. The output rose again to reach 1.967 million tons. China's steel industry has been operating at an average daily level of over 1.9 million tons for five consecutive months. While construction and industry have fully entered the traditional off-season, effective demand continues to weaken, coupled with Angang and other leading steel companies have adjusted prices, the market mentality continues to change, all types of businesses have joined the price reduction team, but still no significant reduction in crude steel production Smaller, further increased the pressure on the downstream market.
From the perspective of the operation of the main varieties, the biggest feature of this week is the decline in the number of threads added. However, from the perspective of the price difference between the varieties, the thread is still relatively high, and the secondary threads are higher than the 5.5 hot coils by 170 yuan/ton.
It is understood that the steel mills have strong bargaining power in the steel trade, and the production and sales rate is close to 100%, the most direct non-market price affecting its profitability, but the steel factory price. In the first half of the year, although the market price was mixed, the overall fluctuation was small. Before the downward trend in the market price, the steelmakers would not normally lower the ex-factory price. The firmness of the ex-factory prices resulted in a relatively good profit for the steel mills. At the level, the enthusiasm of the steel mills will naturally not fade. However, judging from the recent retreat of the ex-factory price and the recent market price of the Baowu Anshan No. 3 large-scale steel plant, the trend of the steel market correction has been basically established, and the steel mills will gradually lower the ex-factory prices, thereby reducing the profitability level. The decline in production.
In terms of inventory, from the perspective of inventory-digested varieties, the decline rate of building materials is significantly higher than that of sheet metal, which is inseparable from the performance of the downstream demand. Automobiles, machinery, shipbuilding, household appliances, and other industries all experienced a certain slowdown under the combined influence of internal and external factors such as policy withdrawal, macro-control, and Japan’s earthquake, while the investment in fixed assets and real estate investment continued to increase at a high level. The demand for building materials has formed a strong support and is one of the main factors in the continued decline of social stocks.
In addition, traders' willingness to sell goods fell, and they took the initiative to reduce stocks. On the one hand, under the control of the policy of continuous monetary tightening, the pressure on some traders has been increasing, which has increased the cost and risk of the traders' picking goods, resulting in traders actively controlling inventory levels to reduce risks; on the other hand, trade The profitability of the business depends on the fluctuation of the steel price and the low price of high steel prices, and even the pattern of the steel price oscillating in the range of only 50 yuan within one month, the price of the steel mill continues to be firm, which also makes it difficult for traders to find a suitable one. The timing of stocking, fast-forward and fast-out became the main operating tactics, and it was difficult for social stocks to accumulate. Third, the expectation of the seasonal correction of steel prices also made traders more cautious with stocks, and the macro economy steadily slowed down under the influence of regulation and control. Demand for sheet metal has shown weakness early. Demand for building materials has supported a period of market. However, with the advent of the high-temperature season in the rainy season, the seasonal decline in demand for building materials will inevitably put pressure on the market to face greater pressure. It is this expectation that causes traders to sell goods. The enthusiasm has dropped dramatically. Overall, the smooth progress of inventory reduction this year is a comprehensive manifestation of active and passive inventory reduction by traders.
The high yield, reduced inventory, and high price of steel are the most important characteristics of the steel market in the first half of the year. The steel market is about to usher in an inflection point and entered a period of weak adjustment of about 2 months. After the plate, the price of building materials also showed a weakness. On the one hand, the price differentiation of the early-stage varieties formed a price difference that needed to be properly repaired. On the other hand, the overall decline in steel prices would inevitably bring about a pullback in the price of raw materials, thus opening up space for steel prices to fall. The price is expected to usher in a wave of 300-400 yuan. At the same time, the factory price adjustment of steel mills has narrowed their profitability, and high production is bound to be difficult to sustain. With the weakening of demand and price correction, the difficulty of downsizing stocks will increase. Traders will also start selling goods at the appropriate time and price to prepare for the wave of price rises that will be brought about by the concentrated start of affordable housing in the second half of the year.
In summary, due to continuous rains over the past few days, weak domestic and international backgrounds, weaker demand, and a change in the overall market mentality, the overall downturn in the domestic steel market has already taken shape, and as the steel market declines, raw material prices will also have Callback.
It is understood that the National Bureau of Statistics announced that economic data in May showed a slowdown in economic growth and severe inflation. In order to curb inflation, the central bank announced that it raised the deposit reserve ratio on the day of data release. Concerns about the international debt crisis in Europe continued, stock indexes and commodities continued to fall. The Dow fell below the key support point of 12,000, and crude oil fell below 95 US dollars.
At the same time, the operating rate of steel mills was high. In the first half of June, the daily output of crude steel increased by 2.7% from the previous month. In May, the average daily average crude steel production in the country was 1.94 million tons, which was slightly lower than that in April, but average daily average steel in early June. The output rose again to reach 1.967 million tons. China's steel industry has been operating at an average daily level of over 1.9 million tons for five consecutive months. While construction and industry have fully entered the traditional off-season, effective demand continues to weaken, coupled with Angang and other leading steel companies have adjusted prices, the market mentality continues to change, all types of businesses have joined the price reduction team, but still no significant reduction in crude steel production Smaller, further increased the pressure on the downstream market.
From the perspective of the operation of the main varieties, the biggest feature of this week is the decline in the number of threads added. However, from the perspective of the price difference between the varieties, the thread is still relatively high, and the secondary threads are higher than the 5.5 hot coils by 170 yuan/ton.
It is understood that the steel mills have strong bargaining power in the steel trade, and the production and sales rate is close to 100%, the most direct non-market price affecting its profitability, but the steel factory price. In the first half of the year, although the market price was mixed, the overall fluctuation was small. Before the downward trend in the market price, the steelmakers would not normally lower the ex-factory price. The firmness of the ex-factory prices resulted in a relatively good profit for the steel mills. At the level, the enthusiasm of the steel mills will naturally not fade. However, judging from the recent retreat of the ex-factory price and the recent market price of the Baowu Anshan No. 3 large-scale steel plant, the trend of the steel market correction has been basically established, and the steel mills will gradually lower the ex-factory prices, thereby reducing the profitability level. The decline in production.
In terms of inventory, from the perspective of inventory-digested varieties, the decline rate of building materials is significantly higher than that of sheet metal, which is inseparable from the performance of the downstream demand. Automobiles, machinery, shipbuilding, household appliances, and other industries all experienced a certain slowdown under the combined influence of internal and external factors such as policy withdrawal, macro-control, and Japan’s earthquake, while the investment in fixed assets and real estate investment continued to increase at a high level. The demand for building materials has formed a strong support and is one of the main factors in the continued decline of social stocks.
In addition, traders' willingness to sell goods fell, and they took the initiative to reduce stocks. On the one hand, under the control of the policy of continuous monetary tightening, the pressure on some traders has been increasing, which has increased the cost and risk of the traders' picking goods, resulting in traders actively controlling inventory levels to reduce risks; on the other hand, trade The profitability of the business depends on the fluctuation of the steel price and the low price of high steel prices, and even the pattern of the steel price oscillating in the range of only 50 yuan within one month, the price of the steel mill continues to be firm, which also makes it difficult for traders to find a suitable one. The timing of stocking, fast-forward and fast-out became the main operating tactics, and it was difficult for social stocks to accumulate. Third, the expectation of the seasonal correction of steel prices also made traders more cautious with stocks, and the macro economy steadily slowed down under the influence of regulation and control. Demand for sheet metal has shown weakness early. Demand for building materials has supported a period of market. However, with the advent of the high-temperature season in the rainy season, the seasonal decline in demand for building materials will inevitably put pressure on the market to face greater pressure. It is this expectation that causes traders to sell goods. The enthusiasm has dropped dramatically. Overall, the smooth progress of inventory reduction this year is a comprehensive manifestation of active and passive inventory reduction by traders.
The high yield, reduced inventory, and high price of steel are the most important characteristics of the steel market in the first half of the year. The steel market is about to usher in an inflection point and entered a period of weak adjustment of about 2 months. After the plate, the price of building materials also showed a weakness. On the one hand, the price differentiation of the early-stage varieties formed a price difference that needed to be properly repaired. On the other hand, the overall decline in steel prices would inevitably bring about a pullback in the price of raw materials, thus opening up space for steel prices to fall. The price is expected to usher in a wave of 300-400 yuan. At the same time, the factory price adjustment of steel mills has narrowed their profitability, and high production is bound to be difficult to sustain. With the weakening of demand and price correction, the difficulty of downsizing stocks will increase. Traders will also start selling goods at the appropriate time and price to prepare for the wave of price rises that will be brought about by the concentrated start of affordable housing in the second half of the year.
In summary, due to continuous rains over the past few days, weak domestic and international backgrounds, weaker demand, and a change in the overall market mentality, the overall downturn in the domestic steel market has already taken shape, and as the steel market declines, raw material prices will also have Callback.
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