Inventory gradually declined Steel rebounded in stages

The downstream downstream consumption has improved, the rebar stocks have continued to decline, Tangshan billet inventory has continued to decline, and supply has remained stable. The fundamentals of steel (3627, 49.00, 1.37%) have continued to improve. Once market confidence has recovered, steel prices will bottom out.

1. Terminal demand increases, and inventory continues to decline High inventory has always been an important factor influencing steel prices. However, with the recovery of downstream consumption, even if national production hits new highs, the social inventory of steel products continues to decline. As of last week, the nation’s steel stocks have declined for 7 consecutive weeks to 2006 tons, down 0.89% from the previous week, with rebar stocks down by 1.6% week-on-week, with wire rods (0, -3627.00, -100.00%). Inventory week fell by 2.26% from the previous week. At the same time, billet stocks in the Tangshan region have continued to decline. Since mid-March, stocks have dropped from 1,979,000 tons to 1,224,000 tons, and the inventory decline trend is very clear.

Second, the short-term ore prices are relatively strong Although the medium and long term, the ore market will become a surplus market, but in the short term, especially before the second quarter of this year, ore prices will not have big changes. The main reasons are as follows: 1. The newly added output of foreign mines will be released in large quantities in the third and fourth quarters, and the new production capacity of foreign mines will be around 50 million tons. 2. The inventory of ore in domestic steel mills is very low. The one-month inventory was substantially reduced to one week's inventory, which is almost the bottom line for normal production of steel mills; 3. Port ore stocks are also relatively low, forming support for the recent price; 4. The mine output has not been released, the current The ore price is considered to be a small profit for domestic mines, and many mines (closed in winter) have no incentive to reopen the already closed production capacity.

Third, the rebar production losses increase, the future supply may decrease in the past month, with the general market decline in commodity prices in the international market, steel prices fell again and again, the 1310 contract once fell to around 3570, the 1305 contract fell to 3418 minimum, and The price of ore only fell slightly, and the production profit of steel mills deteriorated. Last week, the loss of rebar steel production was nearly 200 yuan, and there are many high-cost small steel mills operating in difficult conditions. In recent days, although steel prices have recovered, but the price of ore has also risen. The production status of steel mills has not improved. In summary, if the losses of steel mills continue to increase, the supply in the domestic market may decrease.

Fourth, in the long term, the current steel price is at a low level. As of this week, the spot price of Grade 3 rebar in Shanghai is around 3500 yuan. If the price is relatively low for a long time, if it is compared with the same period in previous years, this The price is more abrupt. From this point of view, the current steel price is also at the bottom of the stage and there is potential for growth. And from the point of view of the spot index, the current spot has been in a state of premium.