Last week's cooling and snowfall weather affected the downstream demand of the terminal, and the data of mysteel thread table demand and cement delivery volume decreased significantly, and the weekly average of the black market fell slightly. It is recommended to pay attention to the differentiation between finished timber varieties: last week, the price difference between coiled snails (hot coil - thread) continued to expand, and the weekly average ** from 0 yuan ton ** to 38 yuan ton.
In the second half of last week, news such as steel mill production cuts and major state-owned banks cutting deposit rates boosted black goods**. It is expected that the short-term will indeed be bullish for steel prices, but it is necessary to pay attention to the sustainability of steel prices**.
Recently, there has been news of production cuts in Jiangsu, Shandong, Anhui and Hebei due to environmental inspections, but the impact of the assessment is limited. From the perspective of the maintenance plan, the maintenance time of most steel mills is basically 10-15 days: the impact of thread output reduction may be concentrated in the next two weeks, but the thread output is still expected to rebound after the resumption of steel mills in early January. And although this round of production reduction is concentrated in the major steel-producing provinces, the actual number of steel mills in each province is extremely limited. The short production cut time and the limited number of steel mill maintenance led to the fact that the raw materials** remained strong: the main iron ore contract and the spot** both hit a new high this year. In the case of limited space for thread production reduction and weak demand, according to the balance sheet, the speed of thread accumulation in mid-January has accelerated significantly, and the total inventory at the end of January is still higher than the level of the same period in previous years (only lower than that in 2020), and the pressure on steel is still there.
2.Last Friday, the state-owned banks cut the deposit rate by 10-25bps again, echoing the requirements of the central bank's monetary policy implementation report in the third quarter to "promote the steady and moderate reduction of financing costs for the real economy" and "stabilize the cost of bank liabilities and enhance the sustainability of financial support for the real economy". Overall AssessmentBelieves that the short-term is good for improving market sentiment, but sustainability remains to be seen:First of all, this is the third time this year that the deposit rate has been cut, and the market reaction after the previous two cuts (June and September) has been far less sustainable than the stimulus of policies such as the trillion yuan of government bonds and real estateSecondly, the one-year deposit rate was still cut by 10bps, maintaining the same range as the previous two cuts this year, which did not exceed market expectations. In addition, the current round of early deposit rate cuts indicates that the intention to ease the pressure on banks' net interest margins is obvious.
To sum up, steel mills are expected to limit production and cut interest rates, which can indeed promote steel prices in the short term, but the strength is limited in terms of degree and sustainability. In the medium term, the monthly report view is still maintained: the downward trend of long-term steel prices under pressure has not changed, but due to the slow accumulation of fundamental contradictions, coupled with the continuous release of favorable policies to release marginal benefits, the center of black commodities has moved slowly downward.
Thread:With the arrival of cold air and the impact of snowfall, thread stocks increased significantly last week compared to last week (+23.).50,000 tons to 55930,000 tons, up from 50,000 tons last week). There are shutdowns at downstream construction sites in Shandong and Henan provinces: last week, the inventory in East China and Central China ended last week, and the trend of destocking for nine consecutive weeks turned into accumulation. Last week, thread production increased by 4 month-on-month60,000 tons to 26150,000 tons, of which the resumption of production of rolling line maintenance steel mills in central China led to an increase of 4 in long-process output20,000 tons.
It is expected that the demand for threads will not improve significantly this week, although the impact of snowfall on logistics has weakened, but the difficulty of project payment collection and the year-end accounting of central state-owned enterprises have led to the seasonal weak trend of thread demand. On the production side, the forward adjustment data indicates that this week's thread output may decline significantly (-50,000 tons to 2.56 million tons): Jiangsu, Shandong and Hebei and other long-term process steel mills have successively arranged maintenance plans;Short-process production was inhibited by the decline in scrap profits (SG made up for scrap steel by 50 yuan at the beginning of the week, and the profit of Pingdian in Jiangsu decreased by 35 yuan to 10 yuan tons month-on-month). Therefore, this week's thread production decline may lead to a slowdown in the accumulation of inventory, coupled with the expected support, it is expected that the average price of thread* in Shanghai will rise month-on-month this week.
It is necessary to pay attention to the sustainability of steel production reduction, considering that this round of production reduction cycle is short, it is expected that the steel mill will be overhauled in early January or begin to resume production, and the thread accumulation will still bring the most pressure. (The balance sheet estimates that the thread inventory level at the end of January next year may be the second highest in the same period in the past five years).
Hot Roll:Affected by the resumption of production of overhauled steel mills last week, the output of hot coil turned from a decline to an increase, with a week-on-week increase of 260,000 tons to 31690,000 tons. At present, the resumption of production of steel mills in December has been basically completed, and the output may fall slightly this week. Last week, the HRC table needed to highlight its strong toughness, increasing by 70,000 tons week-on-week to 3.26 million tons. The range of hot coil destocking has expanded, and the total inventory has decreased by 8 week-on-week80,000 tons to 31430,000 tons. The social treasury exceeded expectations and went to the treasury by a large margin1250,000 tons (due to the impact of the weather, the delivery of steel mills will increase the range of social treasury destocking). The fundamentals of hot coils are healthy, and the expectation of interest rate cuts and the news of production restrictions in some regions have lifted the weakening hot coil futures at the beginning of the week.
It is expected that the output of hot coil will decline slightly this week, and the demand may fall slightly, but it is a fluctuation above the resilience. Considering that the market expectation improvement last week may continue to the beginning of this week, it is expected that ** will rise first and then fall, but ** will be limited. At the same time, due to the maintenance of the strength and toughness of hot coil, the seasonal weakening trend of thread demand remains unchanged, and the coil difference may remain in the range of 50-60 yuan.
Iron Ore:Last week, the weekly average price of PB powder in Qingdao Port was 1,000 yuan ton, compared with 2 yuan ton last week. Under the influence of heavy snow, the market at the beginning of the week continued the weak trend of last weekend. However, in the middle of the week, the market rumors that Iranian mines will raise export tariffs, Tangshan billet rolling mill due to environmental protection inspectors all stopped, and banks cut deposit interest rates on Friday, Qingdao Port PB powder ** rebounded to 1020 yuan ton, setting a new record for the year.
Under the influence of bullish sentiment and capital entry, there is still a possibility that mining prices will continue to rise in the short term. However, the recent increase in the number of steel mills that have stopped production due to overproduction and routine maintenance, and the loss of steel mills per ton of steel has expanded again to around 50-100 yuan, which will also affect the determination of steel mills to self-storage. Therefore, it is expected that the mining price may rise and fall this week.
Bifocal:Last week, the weekly average of quasi-first-class coke at the port was 2,396 yuan, down 74 yuan tons from last week. Last week, the impact of the weather gradually weakened, but the downward trend of downstream terminal demand did not change, and due to the further expansion of steel mill losses, the recent increase in blast furnace maintenance, steel mills purchased raw materials on demand. At the same time, under the new coke production capacity in December and the recovery of coke profits, coke production rebounded slightly, and coke enterprises continued to accumulate coke in the factory.
However, considering that the coke inventory of steel mills is still at a low level, there is still an expectation of replenishment before the holidayAnd the market's sentiment for interest rate cuts is high, which is expected to boost market sentiment in the short term, and raw materials will continue to be maintained.
Last week, the weekly average of low-sulfur main coking coal was 2,450 yuan, the same as last week. Affected by safety inspections and the completion of production tasks at the end of the year, coal mines have been shut down for maintenance, and supply has been tightened again. Although there is still room for replenishment before the Spring Festival, the coking coal replenishment of downstream coking and steel enterprises was relatively fast, and the decline in terminal demand due to the cold weather led to limited inventory consumption in the plant, and it is expected that the follow-up replenishment speed will slow down, and the fundamentals of coking coal will show a tight balance between supply and demand in the short term.
At present, the impact of coal mine production reduction caused by energy shortage in Mongolia has not caused significant market fluctuations for the time being, but it remains to be seen whether the impact will continue, and if it cannot be solved in the short term, it is expected that the domestic demand for main coking coal will increase slightly after the depletion of Mongolian coal transit stocks.
Note: In the textThe numbers represent the following specifications (excluding scrap steel, all include tax**).
Thread: Shanghai threadhrb400e20mm
Hot coil: Shanghaiq235b4.75*1500*c.
Iron ore: Qingdao PortpbPowder (car plate including tax wet ton**).
Scrap: Zhangjiagang Heavy Scrap (thickness6mm
Coke: Rizhao Port quasi-first-class delivery
Coking coal: Linfen low-sulfur main coke