Steel traders: the second half of the steel market is not optimistic
Since the beginning of September, there have been a lot of good news. Firstly, the resumption of china-us trade talks and the increase of counter-cyclical adjustment of macroeconomic policies in China have raised the expectation of infrastructure investment and continued monetary easing.In addition, the central bank announced on Friday evening to cut the reserve requirement ratio, will release 900 billion funds, steel prices have been rising recently.For the present good steel market, and some steel traders are still worried that the steel market is not optimistic.
As of September 10, 2019, according to monitoring data show that domestic top ten key cities tertiary rebar (Φ 25 mm) the average price is 3801 yuan/ton, the rise in 7 working days in a row, cumulative rose 117 yuan/ton, the steel price back to 3800 yuan;As of September 10, 2019, the previous rebar futures 2001 contract rose by 32 yuan/ton, or 0.93%, to 3,479 yuan/ton.
For the late steel market trend, Beijing Zhonggang trading co., LTD. Chairman Zhang Yahui said, is expected to short-term thread disk surface is still strong shock.At present, China’s fiscal policy requires special bonds to be issued by the end of September and fully allocated in October. The central bank has announced a RRR cut, freeing up about 900 billion yuan of liquidity, which will give a strong boost to market confidence.And industry level, steel overhaul more, need to release steadily, inventory decline expansion, and Tangshan heating season production limit plus yard rumors, market supply still exist contraction expectations.Although the current market trend is good, but Zhang Yahui is not optimistic about the second half of the market trend.
Qiao zhongmin, general manager of Beijing Jizuonian trading co., LTD., said that from the current point of view, the demand is faster than expected, the storage speed is fast, and the short-term increase is the main.But the late trend is uncertain, he is not optimistic about the steel market in the fourth quarter, unless steel mills appear large area overhaul, production, and environmental protection increase, the market may continue to be good.
First of all, from the perspective of environmental protection, in order to welcome the “celebration of the 70th anniversary of the founding of the People’s Republic of China”, Shandong, Shanxi, Linfen, Tangshan Qian ‘an area, Zunhua city, Tangshan Lunan district, Fengnan district, Anyang city of Henan province and other places have issued the production restriction notice.In addition, starting from September 2, the state council decided to carry out the sixth round of inspections, with 16 inspection teams dispatched to 16 provinces, autonomous regions and municipalities to conduct on-the-spot inspections.It can be seen that the current policy of environmental protection limit production has the sign of tightening, which will have a certain restriction effect on the later production, steel price will form a certain support.
In terms of output, according to statistics from China iron and steel association, the average daily output of crude steel of key steel enterprises in mid-august 2019 was 2.0542 million tons, an increase of 0.62 million tons or 0.3%.Crude steel production rose in August, as the environmental restrictions weakened, leading to a rise in operating rates.From the recent data can be seen, this year’s summer steel market supply and demand environment is nearly four years the most prominent contradiction.
With the improvement of the demand, the social inventory has seen 4 consecutive drops. According to the monitoring data of Lange steel cloud business platform, as of September 6, the social inventory of steel in 29 key cities in China was 10.786m tons, which had a cumulative decline of 801,000 tons in 4 weeks, a year-on-year decline of 6.9%, and a year-on-year increase of 26.3%.With the inventory continuous decline, will gradually ease the pressure of supply and demand.
Raw material respect, according to monitor data to show, in August Tangshan area 66% grade dry base iron fine powder average price is 887 yuan, compared with the month fell 52 yuan, fall 5.5%;In terms of imported iron ore, the average price of 61.5% fine ore in Rizhao port of Australia was 750 yuan, down 150 yuan or 16.7% from the previous month.The iron ore market fell sharply in August, which will reduce cost support.
MaLi, an analyst, said that the market still has some resilience in September, and the limited production and seasonally improved demand before and after the 70th anniversary celebrations will give some support to the market.But after entering October, especially into winter, the steel market risk factor gradually increased;Prices are likely to be much lower this winter than in the previous two, as high production and capacity releases combine with low economic growth.