Can steel price usher in an outbreak period again?

The recent rain and snow cooling weather in the north will continue to spread, after a wave of cooling will be fully into winter, the billet price has risen 180 yuan since November, then before the "frozen soil" shutdown, steel prices will usher in an outbreak period again?

costs

On 20th, jin-Ji steel enterprises immediately excluded the cost of hot metal without tax, equivalent to about 3,319 billet with tax, tangshan square billet ex-factory price 3,630, the profit is about 311 yuan/ton.The cost of molten iron inventory is expected to be around 2539 (excluding tax), which is equivalent to about 3208 tax-inclusive cost of billet, and the profit is about 422 yuan/ton.

Aspects of supply and demand

On November 20, the operating rate of tangshan blast furnace was 80.63%, 1.67% lower than that of last week. The total maintenance capacity was 25,444 cubic meters, affecting the output of 496,600 tons.

Production of large varieties edged up 67,000 tonnes on Friday, while inventories fell another 965,900 tonnes from last week.The total inventory of rebar fell by 716,700 tons, and the social stock fell by 576,900 tons, the sixth consecutive week of decline.

In October 2020, the national output of crude steel was 92.202 million tons, with a year-on-year growth of 12.7%.From January to October, China's crude steel output was 873.933 million tons, up 5.5% year on year.

Terminal message surface

Automobile: Recently, China's regular session of the deployment to boost major consumption and promote the release of rural consumption potential;In determining the measures to support the development of "Internet + tourism" to meet consumption upgrading demand, it is proposed to stabilize and expand automobile consumption.We will encourage local governments to adjust and optimize measures to limit purchases and increase the number of license plates.

Real estate: From the perspective of economic data, the investment in real estate from January to October increased by 6.3% year on year, 0.7 percentage points higher than that from January to September. The investment in real estate development in October alone increased by 12.7% year on year, with the growth rate expanding by 0.7 percentage points month-on-month. The investment data is further upward.

Summary: From the above data: cost, the continuation of the growth trend, is one of the factors supporting the steel mill flatten mentality;In terms of supply and demand, affected by the relocation of steel mills from production capacity, etc., the maintenance of blast furnaces is increased this week. It is reported that there are still some steel mills that are expected to withdraw from production capacity and stop production next week, so the blank supply may be tightened.Although the inventory reduction of downstream finished materials has narrowed slightly and the overall demand has also dropped, it is still in the state of destocking and the demand is also supported.Terminal macro as a whole is good, it is expected that the trend in the later period still has room to rise, but due to seasonal factors, the narrow range shock after the upward or usher in a weak balance mode.