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Steel: inventory digestion pressure is bigger, steel price weak shocks

Steel: inventory digestion pressure is bigger, steel price weak shocks

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[Abstract]:
Atthebeginningofthemonth,wethoughtthatthepriceofsteelwoulddescend,andtheprobabilitywouldtriggermorewinterstoragestockstodrop,andthensuppresssteelprices.Fromthesurvey,thetraysituationwasbetterthanthema

At the beginning of the month, we thought that the price of steel would descend, and the probability would trigger more winter storage stocks to drop, and then suppress steel prices. From the survey, the tray situation was better than the market expectations, but the self - realization of the price was still started, and the price of steel futures accelerated down last week because of the black swan incident in the US trade war. The reason is that there are still many core contradictions.

In the cycle of self realization of the price of steel, the market psychology of buying and falling does not buy the market. When the price goes down, it will make the immediate consumption drop, and the watch and see increase, and then the stock pressure is greater, the seller is increasing, the price continues to pressure down, the watch continues to increase, the price will be self realized. When the inventory falls to the speculative demand that can not fully match the rigid demand and the low price triggered by the low price, the price will be realized from the downward self to the price, which shows the price uplink, the participants wait-and-see, the rigid demand release quicker, and the investment demand increases, while the seller has a certain degree of pity. Sale or even closure, reduce supply, stimulate the price further upward, speculative demand increase the total inventory, price upward self realization, when the stock to fully match the rigid demand, the price upward sluggish or market expectations change, before the speculative demand is changed to supply, making supply stage surplus, price pressure.

Purchase quantity of Shanghai snail

From the purchase of Shanghai snail, the market is expected to be weak at the beginning of 2016, and the winter storage size is smaller than the last two years. Therefore, the seasonal turnover before and after the Spring Festival is almost stagnant, similar to that in 2015. With the periodic recovery of the industry, the size of the winter storage is progressively higher, the 2017 is better than the 2016, but the same is the same. In 2018, the overall transaction was close to the same period in 2016. With the seasonal rework, the turnover rate was far weaker than the same period in 2017, while the demand for the peak season was less than expected in the middle of March 2017, and the whole 2 quarter was in the state of digesting the stock.

From the purchase of Shanghai snail, the market is expected to be weak at the beginning of 2016, and the winter storage size is smaller than the last two years. Therefore, the seasonal turnover before and after the Spring Festival is almost stagnant with 2015; with the periodic recovery of the industry, the winter storage scale is gradually higher, the 2017 is better than the 2016, but the same is much higher than that in 2016. In 2018, the overall transaction was close to the same period in 2016. With the seasonal rework, the turnover rate was far weaker than the same period in 2017, while the demand for the peak season was less than expected in the middle of March 2017, and the whole 2 quarter was in the state of digesting the stock.

By March 23rd, the latest social inventory of screw steel was 10 million 368 thousand and 800 tons, an increase of 3 million 47 thousand and 400 tons compared with the same period last year, an increase of 1 million 761 thousand tons from last month, and a 363 thousand and 600 ton drop compared with last week. The latest social inventory of hot rolled coils is 2 million 710 thousand and 100 tons, 354 thousand and 600 tons down from the same period last year, 327 thousand and 600 tons last month, and 62 thousand and 100 tons down from last week. This year, due to the lag of Spring Festival, the accumulative time of inventory is also lagging behind.

Social inventory of screw steel

[steel] inventory digestion pressure is bigger, steel price weak shocks

From the inventory structure, compared with last year, steel inventories increased in thread and wire. From the Shanghai snail procurement, 2018 is stronger than 2015 and 2016, close to the same period in 2014 and weaker than 2017. It can be considered to be less than 2017 and close to 2014. From 14 to April 2014 March 2014, 25 was the fastest time in the first half of the year, and the daily thread stock declined by 48 thousand and 600 tons / day, while the same method in 2017 was 51 thousand and 300 tons / day. Two more faster, then in the early May compared with the same period in 2017 more than 330 tons more than 2 million 800 thousand tons in the early June; if the two slow speed, then in the early May compared with 2014 more than 40 million tons more, in the early June more than 30 tons more. The above shows the overall inventory pressure is larger, it is difficult to achieve the 2 quarter of 2017 to continue to go to stock, and then as low stock can not fully meet the rigid demand, the price into the uplink self - realization track. It is estimated that due to the greater pressure of inventory digestion, steel prices will be vulnerable to shocks.

Risk point: domestic interest rate upward downward trend in real estate is expected to exceed expectations.