This year the "cold stream in the steel city" seems to have hit ahead of schedule.
After the National Day, various steel prices in the domestic steel market continued to usher in a rise. However, due to the impact of the economic environment, the terminal's demand is not satisfactory, and steel stocks are increasing. In the short-term, the steel industry will be re-entered into a “defective†situation.
Based on a variety of uncertainties, Wang Jinhua, a research fellow of China Gold Securities' steel industry, is cautious about the outlook. He believes that from the perspective of synchronous indicators, leading indicators and international indicators from the perspective of previous years, in November 2010 around the Chinese steel industry may usher in the turning point of the economy.
Signal One: Demand continues to show weakness According to statistics, as of August this year, the national output of crude steel has decreased consecutively in April, showing negative growth year-on-year. Among them, the average daily production of long products in August decreased by 5.78% from the previous peak (June 2010).
In this regard, Wang Zhaohua told this reporter that due to the fact that small steel companies mainly produce long products and are the most profound experience in the market, the above figures have already shown a good reduction in the output of small steel mills. In addition, a large area of ​​power cuts has not yet started in August, which indicates that the demand for the steel industry has deteriorated.
The economic development of the steel industry still failed to get out of the previous downturn.
According to Liu Qiuping, chief analyst of the Nisshin Shinkansen Line, the recent rise in steel prices is more of a “bitter pleasureâ€, not driven by its own factors, and the fact that steel supply exceeds demand remains unchanged, and social inventories will continue to increase.
According to the author's understanding, the steel price policy officially announced by Baosteel in November was still cautious in general, and continued to steadily increase the route slightly.
According to a latest research report from Guojin Securities, the actual domestic steel demand in July increased by 1.05% from the previous year, a decrease of 11.98% from the previous high (April 2010), while the previous five months were lower than in June. 2.19%, 2.17%.
From the consumer side, not only the shipbuilding industry and the auto industry have not yet fully emerged from the crisis, and the re-launch of real estate regulation and control “combination boxing†before the holiday also extinguished the rising demand for steel products. The fall in the growth rate of investment in fixed assets and the fall in the growth rate of real estate development will all make domestic steel demand weaker in the fourth quarter.
Wu Jingquan, deputy general manager of Shanghai Ningjin Iron & Steel Co., Ltd., told the author that the company has not purchased for two months. Although there are still market conditions, photodigestion stocks are enough.
In fact, bearish sentiment in the domestic steel market has started to permeate. Xie Zhaowei, a researcher at the Huatai Great Wall Institute Research Institute's steel department, said: "The trend is likely to continue to spread."
However, the “windfall in production†movement of the steel mills, which is currently under intense tension, “is far below the government’s requirementsâ€. Wang Zhaohua stated that the power cuts of steel mills in Tangshan and other places may be “thundery, small†and “gradual "Weak, not far off," steel prices may continue to call back in the short term, and the steel industry will return to a meager profit once again.
Signal two: The M2 growth rate has been the lowest since two years ago. At present, the contradiction between supply and demand is not acute. The biggest factor that causes price weakness and may even trigger a new round of price drop risk lies in the uncertainty of the policy.
Whether it is the interest rate hike caused by negative interest rates for seven consecutive months or the risk of secondary regulation caused by the rebound in the property market, it is enough to trigger deep turmoil in the capital market. Liu Qiuping talked about this, this way, it will also form an obvious constraint on the cost of capital and demand for the steel market.
According to the August 2010 financial statistics report issued by the Central Bank, at the end of August, the balance of broad money (M2) was 68.75 trillion yuan, a year-on-year increase of 19.2%, an increase of 1.6 percentage points from the previous month but a 9.3% drop from the same period last year. Percentage.
Recalling that in the second and third quarters of this year, total social fixed asset investment and M2 accounted for about 80% and 20 times of GDP respectively, which is the highest value in recent years. This is the result of the overly relaxed fiscal and monetary policies of the central government during the financial crisis. It also means There is a low probability of substantial subsequent easing.
Wang Zhaohua, through research experience over the years, predicts that steel prices in the country may reach a bottom around November this year.
In his analysis, three experiences since 2004 showed that domestic steel prices began to peak after five to seven months after M2 reached its peak; and one experience since 2004 also confirmed that M2 increased. In the four months following the speed limit, domestic steel prices will usually bottom out.
It is understood that in July 2010, the domestic M2 growth rate was 17.62%, the lowest since 2009.
Despite rebounding to 19.21% in August, some experts in the industry have indicated that they are expected to remain above 18% in the future. This figure has to cause the industry's concern about the trend of steel prices.
Signal 3: The spread between hot-rolled and rebar is getting larger and larger. Usually, the price difference between hot-rolled and thread is an important indicator of the bottom of the steel price.
According to data from the Bohai Sea Commodity Exchange, on October 13th, hot-rolled coils opened 4360, with a maximum of 4381 and a minimum of 4360, closing at 4381, an increase of 0.05% from the settlement price of the previous day. The national spot market price was between 4260 and 4350 yuan/ton on the same day.
The data from the well-known steel spot trading platform - XiBin Shinkansen monitoring data shows that HRB400 steel 10mm specifications offer 4720 yuan / ton, 12/14mm specifications offer 4600 ~ 4630 yuan / ton, 16-25mm specifications quoted basically in 4460-4550 RMB/ton, 28/32mm specifications are quoted at 4,650 yuan/ton, and 36/40mm specifications are reported at 5010 yuan/ton.
Despite a slight drop from the previous day, the price of hot rolled steel is still very much upside down. Wu Jingquan lamented that "this is a very unreasonable phenomenon and it has been going on for some time."
Four experiences since 2006 have shown that steel prices have bottomed out in a very short period of time after the price of hot rolled steel and rebar has been inverted. This may be the internal law between the prices of varieties of steel at work.
Wang Zhaohua stated that 35% of rebar output comes from non-steel member companies, and only 15% to 20% of the coils come from non-steel member companies. This means that small companies contribute more rebar production, and small companies are highly profitable. Sensitivity, that is, the cost support of thread prices is higher.
Signal No. 4: Export demand has bottomed out before and after November. On the export side, the recent sluggish demand from foreign countries and the adjustment of export tax policies have jointly suppressed the direct export of China's steel.
According to data from the General Administration of Customs, in August 2010, the country’s crude steel exports were 3 million tons, a decrease of 38.05% from the previous month, and the proportions of crude steel exports and net exports accounted for 5.81% and 2.87%, respectively, which were historically low.
The reason is not difficult to see, on the one hand is the July 15 domestic partial steel export tax rebate was formally canceled; the other hand, the domestic and foreign steel price difference is increasingly shrinking. In addition, "it is also related to the pressure caused by the recent appreciation of exports on exports," Liu Qiuping believes that at the same time, the international market demand situation is not optimistic, and naturally has a limited role in domestic steel exports.
However, Wang Zhaohua, who has many years of research experience, still maintains a positive attitude toward the long-term export situation.
"China's crude steel exports may have bottomed out and rebound before and after November." He analyzed that domestic steel prices have risen significantly higher than that of foreign countries since September, further weakening the price advantage of domestic steel products, while foreign users usually place steel orders about 1 to 2 months in advance.
Based on this calculation, the steel export situation in the next two months is not optimistic.
Based on the scrap price, which has become the leading indicator of steel prices in many countries, despite the recent loosening of international scrap prices, international scrap prices have risen 7% to 35% during the period from July 23 to September 24, so the future The overall international steel price is expected to show stability, with a lower probability of at least a substantial decrease.
Wang Zhaohua emphasized that in the future, domestic steel prices will show a weak trend, which means that the domestic steel price advantage will be stronger, which will help steel products exports resume after November.
In view of the fact that the foreign steel production in August has been falling month-on-month for four consecutive months, this phenomenon is rare. It is believed that under the dual effects of real economy demand and make-up storage, foreign steel production in the future and imports to China will also rise.
After the National Day, various steel prices in the domestic steel market continued to usher in a rise. However, due to the impact of the economic environment, the terminal's demand is not satisfactory, and steel stocks are increasing. In the short-term, the steel industry will be re-entered into a “defective†situation.
Based on a variety of uncertainties, Wang Jinhua, a research fellow of China Gold Securities' steel industry, is cautious about the outlook. He believes that from the perspective of synchronous indicators, leading indicators and international indicators from the perspective of previous years, in November 2010 around the Chinese steel industry may usher in the turning point of the economy.
Signal One: Demand continues to show weakness According to statistics, as of August this year, the national output of crude steel has decreased consecutively in April, showing negative growth year-on-year. Among them, the average daily production of long products in August decreased by 5.78% from the previous peak (June 2010).
In this regard, Wang Zhaohua told this reporter that due to the fact that small steel companies mainly produce long products and are the most profound experience in the market, the above figures have already shown a good reduction in the output of small steel mills. In addition, a large area of ​​power cuts has not yet started in August, which indicates that the demand for the steel industry has deteriorated.
The economic development of the steel industry still failed to get out of the previous downturn.
According to Liu Qiuping, chief analyst of the Nisshin Shinkansen Line, the recent rise in steel prices is more of a “bitter pleasureâ€, not driven by its own factors, and the fact that steel supply exceeds demand remains unchanged, and social inventories will continue to increase.
According to the author's understanding, the steel price policy officially announced by Baosteel in November was still cautious in general, and continued to steadily increase the route slightly.
According to a latest research report from Guojin Securities, the actual domestic steel demand in July increased by 1.05% from the previous year, a decrease of 11.98% from the previous high (April 2010), while the previous five months were lower than in June. 2.19%, 2.17%.
From the consumer side, not only the shipbuilding industry and the auto industry have not yet fully emerged from the crisis, and the re-launch of real estate regulation and control “combination boxing†before the holiday also extinguished the rising demand for steel products. The fall in the growth rate of investment in fixed assets and the fall in the growth rate of real estate development will all make domestic steel demand weaker in the fourth quarter.
Wu Jingquan, deputy general manager of Shanghai Ningjin Iron & Steel Co., Ltd., told the author that the company has not purchased for two months. Although there are still market conditions, photodigestion stocks are enough.
In fact, bearish sentiment in the domestic steel market has started to permeate. Xie Zhaowei, a researcher at the Huatai Great Wall Institute Research Institute's steel department, said: "The trend is likely to continue to spread."
However, the “windfall in production†movement of the steel mills, which is currently under intense tension, “is far below the government’s requirementsâ€. Wang Zhaohua stated that the power cuts of steel mills in Tangshan and other places may be “thundery, small†and “gradual "Weak, not far off," steel prices may continue to call back in the short term, and the steel industry will return to a meager profit once again.
Signal two: The M2 growth rate has been the lowest since two years ago. At present, the contradiction between supply and demand is not acute. The biggest factor that causes price weakness and may even trigger a new round of price drop risk lies in the uncertainty of the policy.
Whether it is the interest rate hike caused by negative interest rates for seven consecutive months or the risk of secondary regulation caused by the rebound in the property market, it is enough to trigger deep turmoil in the capital market. Liu Qiuping talked about this, this way, it will also form an obvious constraint on the cost of capital and demand for the steel market.
According to the August 2010 financial statistics report issued by the Central Bank, at the end of August, the balance of broad money (M2) was 68.75 trillion yuan, a year-on-year increase of 19.2%, an increase of 1.6 percentage points from the previous month but a 9.3% drop from the same period last year. Percentage.
Recalling that in the second and third quarters of this year, total social fixed asset investment and M2 accounted for about 80% and 20 times of GDP respectively, which is the highest value in recent years. This is the result of the overly relaxed fiscal and monetary policies of the central government during the financial crisis. It also means There is a low probability of substantial subsequent easing.
Wang Zhaohua, through research experience over the years, predicts that steel prices in the country may reach a bottom around November this year.
In his analysis, three experiences since 2004 showed that domestic steel prices began to peak after five to seven months after M2 reached its peak; and one experience since 2004 also confirmed that M2 increased. In the four months following the speed limit, domestic steel prices will usually bottom out.
It is understood that in July 2010, the domestic M2 growth rate was 17.62%, the lowest since 2009.
Despite rebounding to 19.21% in August, some experts in the industry have indicated that they are expected to remain above 18% in the future. This figure has to cause the industry's concern about the trend of steel prices.
Signal 3: The spread between hot-rolled and rebar is getting larger and larger. Usually, the price difference between hot-rolled and thread is an important indicator of the bottom of the steel price.
According to data from the Bohai Sea Commodity Exchange, on October 13th, hot-rolled coils opened 4360, with a maximum of 4381 and a minimum of 4360, closing at 4381, an increase of 0.05% from the settlement price of the previous day. The national spot market price was between 4260 and 4350 yuan/ton on the same day.
The data from the well-known steel spot trading platform - XiBin Shinkansen monitoring data shows that HRB400 steel 10mm specifications offer 4720 yuan / ton, 12/14mm specifications offer 4600 ~ 4630 yuan / ton, 16-25mm specifications quoted basically in 4460-4550 RMB/ton, 28/32mm specifications are quoted at 4,650 yuan/ton, and 36/40mm specifications are reported at 5010 yuan/ton.
Despite a slight drop from the previous day, the price of hot rolled steel is still very much upside down. Wu Jingquan lamented that "this is a very unreasonable phenomenon and it has been going on for some time."
Four experiences since 2006 have shown that steel prices have bottomed out in a very short period of time after the price of hot rolled steel and rebar has been inverted. This may be the internal law between the prices of varieties of steel at work.
Wang Zhaohua stated that 35% of rebar output comes from non-steel member companies, and only 15% to 20% of the coils come from non-steel member companies. This means that small companies contribute more rebar production, and small companies are highly profitable. Sensitivity, that is, the cost support of thread prices is higher.
Signal No. 4: Export demand has bottomed out before and after November. On the export side, the recent sluggish demand from foreign countries and the adjustment of export tax policies have jointly suppressed the direct export of China's steel.
According to data from the General Administration of Customs, in August 2010, the country’s crude steel exports were 3 million tons, a decrease of 38.05% from the previous month, and the proportions of crude steel exports and net exports accounted for 5.81% and 2.87%, respectively, which were historically low.
The reason is not difficult to see, on the one hand is the July 15 domestic partial steel export tax rebate was formally canceled; the other hand, the domestic and foreign steel price difference is increasingly shrinking. In addition, "it is also related to the pressure caused by the recent appreciation of exports on exports," Liu Qiuping believes that at the same time, the international market demand situation is not optimistic, and naturally has a limited role in domestic steel exports.
However, Wang Zhaohua, who has many years of research experience, still maintains a positive attitude toward the long-term export situation.
"China's crude steel exports may have bottomed out and rebound before and after November." He analyzed that domestic steel prices have risen significantly higher than that of foreign countries since September, further weakening the price advantage of domestic steel products, while foreign users usually place steel orders about 1 to 2 months in advance.
Based on this calculation, the steel export situation in the next two months is not optimistic.
Based on the scrap price, which has become the leading indicator of steel prices in many countries, despite the recent loosening of international scrap prices, international scrap prices have risen 7% to 35% during the period from July 23 to September 24, so the future The overall international steel price is expected to show stability, with a lower probability of at least a substantial decrease.
Wang Zhaohua emphasized that in the future, domestic steel prices will show a weak trend, which means that the domestic steel price advantage will be stronger, which will help steel products exports resume after November.
In view of the fact that the foreign steel production in August has been falling month-on-month for four consecutive months, this phenomenon is rare. It is believed that under the dual effects of real economy demand and make-up storage, foreign steel production in the future and imports to China will also rise.
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