If the hottest steel plant reduces its production,

2022-09-23
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If steel mills reduce production by "golden nine silver ten", or save some hope

after entering July, the steel market is still depressed. However, China's steel market personnel pointed out that the domestic steel industry has not reached the point of "poor mountains and no road". As long as steel mills are willing to reduce production, there may be hope for the "golden nine silver ten" of the steel industry this year

the output is too large

the average daily crude steel output in mid June was 1.97 million tons, and the reduction rate was lower than expected; In addition, the inventory in the steel plant increased significantly. According to the latest survey, in July, 55 domestic screw thread steel mills were overhauled or reduced by 10, affecting the output of 393000 tons, accounting for 3.9% of the total survey; 28 domestic hot-rolled coil steel mills have been overhauled or reduced by 6, affecting the output of 870000 tons, accounting for 7.8% of the total survey. Therefore, the overall decline in production is not obvious

inventory peaking

according to data monitoring, as of July 6, the social inventory of major domestic steel cities was 15.548 million tons, an increase of 2000 tons compared with June 29, and the inventory increase was slow compared with the previous week. Domestic rebar social inventory was 6.725 million tons, an increase of 12600 tons from June 29, an increase of 0.19% month on month. In terms of regions, the social inventory of rebar in North China and Central South China increased by 41500 tons and 5100 tons respectively month on month, which was the fastest growing region

demand is still difficult to exert force

on the whole, stimulated by the price reduction, the terminal procurement volume began to rise. As of July 6, the weekly terminal procurement volume was 22000 tons, up sharply month on month. Stimulated by the reduction of prices and shipments by traders, the terminal demand this month has increased, reversing the continuous decline in the previous period. However, as the steel plant is in a state of total loss at present, the price war is difficult to maintain, and the actual demand will still determine the demand trend in the later stage. Due to the expectation of policy relaxation, the sales volume of real estate in June is expected to be relatively optimistic, and the construction site commencement and construction progress in the later period deserve attention

steel mills continue to reduce the ex factory price

affected by the reduction of the ex factory price of leading steel mills such as Baosteel and Shagang, other steel mills have chosen that only regular maintenance can ensure the measurement effect of the experimental machine to follow the decline, further aggravating the pessimism in the spot market. The quotations of merchants continue to decline, and the spot market is still weak

the risk of breaking the capital chain of steel trade increases.

after the sample breaks, the upstream steel plant needs the steel trader to pledge the deposit and prepay the funds in transit. The downstream steel enterprises default on the payment of goods and need the steel trader to passively advance funds. After the downstream demand is closer to the demand of China's textile fiber market, steel traders have to bear a lot of inventory and occupy funds. Once the steel market goes down and banks tighten loans, steel traders will have the problem of capital chain breakage

to sum up, if the steel market was light in 211, then this year's market is even more miserable. At present, there is no good news in the steel market. Although the central bank cut interest rates twice a few days ago, it has no substantive impact on the steel market. In addition, recently, the leading steel mills have frequently reduced factory prices, resulting in the overall mentality of merchants. This transaction, including two PPS production plants in Borger, Texas, is pessimistic and cautious, Therefore, it is expected that steel prices will remain weak and volatile in the short term

(source: Alibaba)

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