Steel "gold nine" do not save "silver ten" can appear

As of September 28, the profile index was 1,353, down 3.18 percent from September 1, according to price data from the Business Press.The price of hot coil is 3880, down 5.31% from September 1. Since September, the profile and hot coil as a whole have been oscillating downward trend.

Mainly due to the small release of steel demand in September, but because the manufacturers optimistic about the market, high production enthusiasm, steel production growth is more rapid, resulting in the slow destocking of the steel market, the market transaction performance is lower than the expectations of merchants for the peak season, steel price upward trend blocked;At the same time, due to the easing of steel cost, iron ore prices began to decline, the product price was affected further downward, the futures market also fell, the market mood is depressed.

First two days, steel prices are expected to run weak turbulence, despite the cost side temporarily stable running, at the same time some downstream first stock operation good demand release, but most of the business because of a previous prices, more bearish point of view, more willing to cut prices on shipping operation, control their own inventory, reduce risk, market overall situation of clinch a deal is expected to average.

The trend before the festival is unlikely to change, mainly to predict the trend after the festival:

On the supply side, from January to August, China's output of pig iron, crude steel and steel was 589.4 million tons, 688.89 million tons and 844.69 million tons respectively, up 3.4 percent, 3.7 percent and 4.8 percent year on year, according to the National Bureau of Statistics.

About to enter the fourth quarter, according to previous years, the fourth quarter of the steel mill will start to gradually overhaul the production plan, the actual effect of production reduction can not be determined.However, as the investment in ferrous metal smelting and rolling processing industry increased by 23.5% year on year in the first August, the national production capacity is likely to expand further, the high supply pressure of steel remains, and the power from the supply end is too strong, which is not conducive to the upward price of steel. In the future, we can pay more attention to the environmental protection policy in autumn and winter or the declining factors of enterprise benefits.

Look at demand side, macroscopic demand of real estate in the fourth quarter still has the toughness and infrastructure investment is expected to accelerate, infrastructure, real estate and manufacturing three August carriage is increased, the three basic economic indicators has been restored to the same period last year level, policy should be to run stability, later a slower growth rate, so will not appear in the downstream demand changes greatly, but the sustainability is still worth looking forward to.In terms of import and export, according to the data of the General Administration of Customs, from January to August, China exported 36.5557 million tons of steel, a year-on-year decrease of 18.6%, an increase of 1 percentage point from January to July.A total of 12.189 million tons of steel were imported, a year-on-year increase of 59.6% and 10.3 percentage points higher than that from January to July.The export disadvantage in the first three quarters is also the influence factor of domestic steel inventory, but with the recent steel price decline, domestic and foreign steel product price difference gradually narrowed, the recent export inquiries began to increase, steel mills to receive orders warming mood, and steel imports will further reduce.

Secondly, the inventory, according to the relevant online data, in September, the total domestic steel inventory (factory warehouse + social warehouse) fell from the previous month, but the decline is lower than the market expectations, in October, the steel inventory is expected to further expand month-on-month decline, but the high inventory pressure is still maintained, the market is expected to maintain a high inventory situation.As of September 24, 2020, China's total steel inventory stood at 22,112,800 tons, down 381,000 tons from the end of August and up 41.9% from the same period last year.As of September 26, 2019, total steel inventories were down 2.348 million tons from the end of August.This short - term inventory reduction, the reason should be due to the approaching holiday, the downstream concentrated procurement stock.

Finally, in terms of cost, according to relevant online data, the total iron ore inventory of 45 ports in China is 116.1605 million tons, increasing for 5 consecutive weeks from the previous month.Iron ore supply gradually relaxed, the previous high ore prices also appeared a sharp correction.Expected later iron ore prices or a small downward, and the impact of the product price pressure.

To sum up, business club data division think holiday should not be significant changes in the downstream demand, toughness, but difficult to release significantly, and the cost side because raw material prices have a downward trend, upward price pressure, producing business concern grows, there will be a price cut shipping operation, reduce inventory in order to reduce risk, mainly is to look at the supply side, if under limit production policy and repair plan, production control, market destocking smoothly, steel prices or may rebound.