My steel: Last week the domestic steel market price shocks strong operation. After the festival, the market returned back gradually, and the demand turnover on the day of the return was small, but the billet price during the holidays, although there is a certain callback in the follow-up, there is still a certain increase compared with last week. In addition, the northern market has begun to enter the state of environment protection again. In the short term, it may be difficult for the supply side to increase. However, considering the recent market has a small amount of goods arrived, but the merchants sell or ship out mainly. The demand in May covers some pre-holidays orders, and most businesses are still at a loss about the follow-up market performance. Therefore, they are cautious in their operation and dare not expand their inventory volume. Comprehensive forecast, this week (2019.5.6-5.10) domestic steel market prices or mainly shock operation.
Tang and Song Iron and Steel: This week is also the accumulation period of the contradiction between supply and demand in the steel market. During this period, the supply of resources will continue to stabilize at a high level, the release intensity of social demand will generally enter a period of gradual weakening, and regional demand will weaken or appear. Although there is a high proportion of environmental protection production limitation plans for blast furnaces and converters in Tangshan area in May, the actual production limitation results still need to be awaited. If the production restriction plan is strictly implemented, it will have little impact on the supply and demand of the market, but it will benefit the futures market and continue to drive up the spot price fluctuation. According to the survey, most steel enterprises in Tangshan have no signs of centralized production restriction in the near future, and high supply status or continue. In addition, the main products of Tangshan steel enterprises are billets, strips, coils, etc. The output of building materials is relatively small, so the key to determine the supply and demand of building materials market is still the degree of demand release at this stage.
Therefore, it is expected that the steel social warehouse will slow down or stabilize next week, and the inventory of building materials in some regions will change from decline to rise. Although the supply and demand of the market is in a weak equilibrium state, there is no outstanding contradiction, but the market mentality may change. However, with the rising cost of steel mills and the high order cost of traders, especially with the continuing strong demand for terminals, the support of stock prices and the resistance to price declines have been strengthened.
It is expected that this week (2019.5.6-5.10) stock steel market will be shocked, including weak price shocks for building materials, continued adjustment of inter-regional prices; obvious price shocks for billets, profiles and wires; and small price shocks for strips and plates. High price shock of iron ore intermediate products; stable price shock of scrap steel; weak price shock adjustment of alloy; stable price of coke.
This week's attention: Tangshan area environmental protection blast furnace production limit actual implementation progress; the main steel variety societies, mills steel inventory reduction rate; key areas of screw steel inventory from decline to rise; key areas of building materials turnover size; futures market short speculation led to a sharp drop in spot prices.
Han Weidong, deputy general manager of Youfa : In May Tangshan and Wu'an, the production limit was not increased, while the demand during May 1st was lower than that in previous years, the decline rate of social stock in the market slowed down, and the market price was in a high position in the turbulence. In this morning's unexpected incident, Trump will impose a 25% tariff on China next week. At the critical moment of the Sino-US negotiations, we do not know whether to coerce or not, which has a great impact on market confidence and we should pay close attention to it. What we can do at present is to follow the trend, measure our output as well as our income, and prevent and control risks.
Post time: May-06-2019