Steel inflection point does not appear to still have no rising conditions

According to the monitoring data of the relevant agencies, the total stock of construction steel in major cities in China was 8.575 million tons, a decrease of 30,600 tons compared with the previous weekend, and the lightening rate was 0.35%. This is already the domestic construction steel inventories for 18 consecutive weeks to lighten up, creating the longest inventory Decline cycle, but the rate of lighten up has slowed down significantly. The five major steel products in the country's 26 major markets (rebar, wire rod, hot rolled coil, cold rolled coil, and plate) had a social inventory of 15.423 million tons, down 11,000 tons from the previous week, and inventory was also continuous 18 Weekly drop.

Since the beginning of this year, the domestic steel market has continued to decline in inventory for more than four consecutive months. The long duration has been rare in recent years. So, what is the deep-seated problem of the continuous reduction of steel stocks for a long time?

In the interview, some operators of steel trade companies stated that the current social inventory of steel products continues to decline, but this does not mean that demand is increasing, steel market will pick up, and steel prices will rise. Don't be fooled by the “false impression” of the decline in steel stocks. The decrease in steel stocks is only a shift in stocks. There is less social inventory, and steel stocks increase.

Some steel trade company bosses said that steel prices have been “upside down” for a long time, and traders are afraid to place orders. The more orders, the more money you lose. “The market is sluggish, the cost is high, the price is upside down, and the warehouse is a dead end!” the general manager of a home steel trading company told the reporter that his company originally ordered 20,000 tons per month from steel mills, and now cut it to three or four thousand tons. From the past two or three million tons, the amount has dropped to less than 5,000 tons. He said bluntly that the inventory reduction is to reduce operating costs, because the current financing costs are too high, if a ton of steel in the warehouse, not sold for a month, the loan interest paid to the bank will be 70 to 80 yuan However, at present, selling one ton of steel also does not earn so much money. Only the amount of inventories is reduced, and the use of funds is reduced.

According to the reporter’s understanding of the situation in the interview, steel trading companies are now significantly reducing their orders to steel mills. The decline is generally above 50%, and some even reach 70% to 80%, resulting in steel traders’ inventory. With continuous reduction, some steel trading companies are even “zero in stock”. Customers need steel and they “move” goods in the market, earning some labor costs.

In a steel spot market, the reporter saw that there were only three or four specifications for the rebar available for sale at the steel trading company here. The high line has only one specification. A company salesman told reporters that "the market is not good, the boss can not order more, afraid of being stuck."

The demand for downstream terminals is not strong, but the output of steel mills is still growing. However, the steel society stocks have dropped for 18 consecutive weeks. Where has the steel products gone? In fact, steel products are mostly stored in steel mills, and the 18-week decline in social inventory is only an indicator of the shift of steel from steel traders to steel mills. Some industry analysts believe that "the current steel factory inventory pressure is higher than the pressure of social stocks." Steel mills in order to attract steel traders order recently cut prices frequently, including a number of large steel companies introduced July steel prices policy are also The "discount" was unveiled, and the decline was not small. The factory prices of cold-rolled hot-rolled plates and other plates fell by RMB 100/t to RMB 300/t.

According to some steel trade company operators, the steel mills have given the steel traders a number of “preferential policies” in addition to the “bright drop” in prices. As long as cash payments are paid, steel prices are very low; some steel traders indicate that Now that we do not sell steel to make money, the steel mills give them a policy of preserving value. As long as they sell off, they do not have to worry about losses. Steel mills continue to drop their factory prices, give steel trading companies various incentives, and even engage in value-preserving sales. All this is to speed up the process of “destocking” and reduce steel plant inventory pressure.

So, the social inventory of steel products has continued to decline for 18 months. Does this mean that steel prices have turned a corner and rebounded sharply? In this regard, the industry pointed out: "In early June, the steel stocks of key enterprises were 11.51 million tons, an increase of 0.14% from the previous period, an increase of 34.5% over the beginning of the year. It is worth noting that during the later period of transfer of steel stocks to social stocks, Or it will trigger the risk of further price cuts."

Some operators believe that the phenomenon of “steel factory stock pressure is higher than social stock pressure” is not normal, indicating that the “reservoir” in the current circulation of steel products has become smaller and its functions have been weakened, which should also lead steel companies to reflect on. The "reservoir" function in the field of steel circulation is reflected in the allocation of resources and adjustment of surplus and deficiency, so the circulation field must maintain a certain amount of inventory. In general, steel stocks in circulation should be larger than stocks in steel mills. In addition to direct sales of steel products produced by steel mills, other steel products should flow to the circulation area, ie, scattered in the hands of steel trade enterprises in various regions, and enter the "water reservoir" to prevent "droughts." From the point of view of the function of “reservoir” in the steel trade industry, steel stocks should be concentrated in the circulation area rather than backlogged in steel mills.

Some steel traders realized that for the current 18-week decline in steel stocks, they must have a correct and comprehensive understanding, grasp their underlying causes, and not be misled by superficial illusions. Judging from the current situation of downstream terminal demand, the shrinking trend continues, especially since it has entered the rainy season. Recently, heavy rains and heavy rains have been falling in southern China and some other domestic cities. Construction works have been greatly affected, and transportation has not been smooth. , resulting in very light steel market transactions; again, nowadays is now mid-year repayment period, the steel trade enterprises in the phase of tension between the contradictions highlights, do not rule out the return of funds for businesses to lower prices, thus curbing the rebound in steel prices. In addition, a batch of iron and steel enterprises have resumed production of equipment that has been preliminarily repaired, and production capacity has been released again. In early June, the average daily output of crude steel once again rose to 2 million tons. In the summer of this year, the power gap has narrowed significantly, and the impact of steel production in the latter period may also be significantly reduced. Economic growth still shows no signs of stabilizing and rebounding. The situation of oversupply of steel products in the latter period is still unlikely to be significantly improved, and the possibility of passive increase of inventory will increase. . It can be seen that although the social inventory of steel products continues to decline, but in the domestic steel stocks as a whole high, the downstream terminal demand shrinks, the steel mills have not yet significantly reduced production, the steel price inflection point will not appear, the conditions for the obvious rise in steel prices is still Do not have.