Cold winter steel prices still exist rebound space!

First, the macro - positive factors

[The overall manufacturing sector continued to pick up, with PMI of 51.4% in October]

National Bureau of Statistics: In October, the MANUFACTURING PMI was 51.4%, which was in the expansion range for eight consecutive months. According to the data from the Bureau, the manufacturing PMI was 51.4% in October, which was slightly lower than 0.1 percentage point in the previous month, but it has been at or above 51.0% since July, which has been in the expansion range for eight consecutive months, and the manufacturing sector has continued to recover.

[Ministry of Industry and Information Technology: Apparent consumption of crude steel from January to September increased by 8.94% year on year to 769 million tons]

China's output of pig iron, crude steel and steel in September was 75.78 million tons, 92.56 million tons and 11.86 million tons, up 6.9 percent, 10.9 percent and 12.3 percent, respectively, according to the Ministry of Industry and Information Technology.From January to September, China's output of pig iron, crude steel and steel was 665.48 million tons, 78.159 million tons and 964.24 million tons respectively, up 3.8 percent, 4.5 percent and 5.6 percent year on year.From January to September, the apparent consumption of crude steel was 769 million tons, up 8.94% year on year and 1.7 percentage points higher than that in the first eight months.

[GDP ranking of the first three quarters: Guangdong, Sulu, top 3, 26 provinces with positive growth]

Shanghai released regional GDP data for the first three quarters of 2020 on Oct 30, marking the beginning of the economic report card for 31 provinces across the country.In terms of total volume, Guangdong Sulu ranks the top three;In terms of growth rate, 26 provinces have become regular provinces, with Xizang the best performer, with a growth rate of 6.3%, 5.6 percentage points higher than the national growth rate.

Second, steel prices hit

Iron ore

Port inventory increased for eight weeks to 127 million tons, setting a new high for the stage, and the growth trend will not decrease.Mine shipments and port trade shipments were positive, platts index maintained at a high of 117 DOLLARS, but the market turnover is low, fear of high sentiment, steel enterprises do not have a large inventory replenishment plan.Lead to mine price rise anemic, drop can period.But the short - term steel demand may drive the price to stop falling and rising, bearish expectations have been alleviated, the overall trend of ore prices look near strong far weak.

【 billet 】

This week, the national steel billet market stability narrow up, tangshan weathervane steel quoted 3440 yuan/ton, including tax factory.Capital pressure, at the end of the businessman shipment drained actively, boost, and futures market to rise higher, but as the heating season approaching, tighter limit production of environmental protection policy, tangshan region downstream of the overall demand less than expected, manufacturers purchase intention is generally poor, and the second outbreak of epidemic, crude oil fell again this week, outside dish green metal futures hold majority, in view of the macro shock instability, markets wait-and-see atmosphere is strong.The price in east China is mainly stable, and the steel mills' willingness to stand prices is dominant at present. Affected by the impact of imported steel billets on the market, the sales of steel billets in local mills are under pressure, but due to the firm cost end, the steel mills are not willing to reduce the price, which is expected to be relatively weak in the stable next week.Tangshan billet inventories continue downward trend this week, but has slowed, and sustained concussion situation in the macro aspect, the domestic futures also produces some negative influence, coupled with the current market acceptance of high resource is limited, stock price steadily increased looks anaemic, next week is expected to billet price swings the probability of the callback is larger, 10 to 30 yuan.

"Building materials"

Early November shagang policy warning, the end of the month futures thread strong upward, market tension is abating, is expected to rise 20-50 policy stability.

In late October the overall construction steel market prices steady before, about 50-80 or so, billet prices weak after the strong overall first rose 50, 3450 yuan/ton, had winter extra demand while still in the backdrop, clinch a deal after a relatively optimistic, according to data show that as of October 30, three leading cities in jiangsu area: shagang big thread factory in Shanghai to ask basic price to 3780 yuan/ton;The base price of shagang large-thread storage in Hangzhou area is quoted at RMB 3840 / ton;Nanjing area Shagang screw plant to raise the base price of 3780 yuan/ton.The average price of Shagang, the leading city in Jiangsu, Zhejiang and Shanghai, was about 3728--3794 yuan/ton at the end of October, and the ex-factory guidance price of Shagang was 3900 yuan/ton at the end of October.

For the building materials market in November, up to now, the current market rising momentum highlighted, billet end support firm and other multi-dimensional good news support, we expect the overall market or for the first strong after weak trend.

The main reasons are as follows:

1. In November, all regions are rushing for construction projects. In the fourth quarter, infrastructure policies have been launched, and the market demand is expected to continue.Phase 2, screw technical movements were small M continuous state, commodities large disk, the good, speculators ing obviously under 3, high cost, steel mills inertia perform lock price policy, listing price is always difficult to break, 4 had winter approaching, coke coke market is relatively strong, have certain support 5 phase of screw, in November, European pandemic secondary explosion, unstable macroeconomic data gather together, share issue linkage effect is stronger, the civil building materials price close, merchants on the above will clear goods, market price is easy to high pared repair base, above all, is expected in October after the first strong weak, the overall amplitude in 20 to 50.

Overview of steel market and trend of next week

Total steel inventories fell 6 per cent this week to 1.3105 million tonnes, down 5.4 per cent last week.Among them, thread 6.747 million tons decreased by 7.6%;1.314 million tons of wire rod by 12.1%, hot rolled 2.774 million tons by 3.3%;Cold rolling 1.115 million tons reduced by 0.5%;Medium plate 1.155,000 tons flat.We believe that this week, steel prices have risen steadily, terminal demand performance is fair, but the main transaction is still concentrated in low resources, businesses are not confident.The easing of financial pressure at the beginning of next week and a large recent inventory decline have also boosted the overall mood, but steel prices are expected to strengthen first and then stabilize next week, given that demand will gradually shrink in the later period.