Steel prices are expected to rise in winter-2020-Boiler Tubes,Heat-Exchanger Tubes,Superheater Tubes,Supplier,Beite

Steel prices are expected to rise in winter-2020

Steel prices are expected to rise in winter

At present, strong consumption is still the main logic of the operation of the domestic steel market, and it has been maintained for three quarters. Not only did the construction sector recover strongly, but the manufacturing industry also turned strong in the second half of the year, forming a "twin engine" pulling effect. Looking forward to the fourth quarter, strong growth in steel consumption is still expected.

According to estimates, the year-on-year growth rate of domestic crude steel consumption continued to maintain at around 20% from April to August, and the growth rate fell to 10% in September. It is expected that the growth rate of crude steel consumption in October will rise again to around 20%. The microscopic manifestations of strong steel consumption are: the domestic real estate industry recovers beyond expectations, infrastructure investment continues to vigorously, and China's exports continue to grow due to the recovery of the overseas economy. Looking forward to the fourth quarter, strong growth in steel consumption is still expected. The macro reasons are: real estate's resilience is not reduced, and under the premise of reducing leverage, rushing to work has become an inevitable choice; overseas economic recovery is still on the right side of the U shape, which will still drive China's export orientation The manufacturing industry continues to recover; infrastructure continues to add icing to the domestic economy. In terms of micro indicators: Excavators with high growth for six months are expected to maintain sales growth of around 50% in October; heavy trucks and other indicators that reflect economic activity perform well; power consumption in the secondary industry and rail freight both maintain 8% The above high growth. In addition, the PMI indicators of the United States, Germany, India and other economies have continuously broken the previous high.

In addition to seasonal factors, the main reason why steel prices fell in September was high supply. One is the sustained high growth of domestic production, and the other is the substantial increase in imported resources. Data show that in the first three quarters, China's net imports of steel billets increased significantly year-on-year. However, since September, billet imports began to fall from the previous month. It is expected that from October to November, imports will continue to fall, thereby further optimizing the inventory structure of domestic finished products. Since October, inventories have been continuously reduced by more than one million tons, of which the contraction of imported resources cannot be ignored.

Although the indicators of construction start, construction machinery, heavy trucks, cement, power generation, freight transport, automobiles, home appliances and other indicators performed well, the real estate data released in mid-October poured cold water on the market. The most unexpected thing is that the new start of real estate appeared monthly. Negative growth.

In order to stabilize expectations and prevent and control risks, the government has introduced the "three red lines" policy at the right time, but the enthusiasm for real estate investment is difficult to reduce. Real estate rushing to work is still a passive or active choice for a long time in the future.

Strong consumption is superimposed on import contraction, and the destocking of steel stocks will continue to occur in unexpected ways. Taking into account the currency environment, the market may no longer pursue ultra-low inventory of commodities, so we expect that before this winter storage, steel inventory will be difficult to reduce to the ultra-low level of the previous two years. Once the inventory is too low, the corresponding price and profit must be better than in previous years.

As winter approaches, the winter reserve will soon be on the agenda. From the perspective of the overall environment, the core dispute of the winter storage is still the long-term production profit. As long as consumption does not collapse, the price of raw materials will not collapse, and the cost will not fall. Therefore, the rebar 2105 contract currently under long process cost has investment value.

Every November is the most difficult month to predict black products. Strong reality VS weak expectations will be launched this month. Therefore, November can be guided by strong reality to get out of the trending up market (2016 and 2019), or it can get out of the price oversold market (in 2017 and 2018) under the dominance of weak expectations. Based on the experience of previous years, we expect that the rebar will continue to rise first and then decline in November this year.

The tight balance between supply and demand in the coke market remains unbroken. Due to the replenishment of a large number of imported resources, the demand for the past few months has been effectively guaranteed, and there has been no major shortage of domestic coke supply. With the reduction in imports and the implementation of capacity reduction in various provinces in the fourth quarter, the supply and demand of the coke market may be tightly balanced. Especially from the long-term analysis, the coke market will maintain a tight supply situation.

Since October, under the background of continuous high shipments, the supply and demand situation of iron ore has improved significantly, from the previous tight balance to oversupply. But the real question is, is the huge future price difference enough to reflect the degree of oversupply in the later period? In the face of strong consumption, iron ore spot prices are still relatively strong, and November iron ore futures are unlikely to have a trend.

Throughout the fourth quarter, the black industry chain will switch in the cycle of "strong consumption and weak expectations". In the later stage, investors not only need to pay close attention to the fundamentals, but also need to keep an eye on the macro. For long-term investors, there may be multiple entry opportunities for black commodities in November.