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Faith in production cuts shattered rebar short-term shocks | Guosen Futures_Sina Finance_Sina.com

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Original title: Faith in production cuts shattered RebarShort-term shocks

main conclusion

Last month, we believed that steel prices tended to rise but harder to fall, but in fact, after the sharp rise in steel prices in May, senior officials began to worry about the excessively high prices of commodities. Previously, the market and the Ministry of Industry and Information Technology and the Development and Reform Commission, which we firmly believe, “the annual crude steel output was only The policy objective of “decrease not increase” seems to have changed, and steel prices have fallen sharply. Judging from the current supply and demand side, policy restrictions on supply exist, but they have not been expanded. Crude steel production still maintains rapid growth, and demand is still relatively good year-on-year. However, from a month-on-month perspective, it has entered a relatively off-season and demand growth has slowed down. slow. However, the current steel price has fallen from the highest point to 1,500 yuan/ton, which has fallen below the cost of steel mills’ blast furnaces.

In terms of supply, profits have turned from positive to negative. Previously, high profits stimulated high production. According to data from the National Bureau of Statistics, in April 2021, my country’s crude steel output was 97.85 million tons, an increase of 13.4% year-on-year; the national average daily output of crude steel in April was 3.262 million tons, an increase of 7.6% from the previous month; from January to April, my country’s crude steel The output was 374.56 million tons, a year-on-year increase of 15.8%. In April 2021, my country’s pig iron output was 75.97 million tons, a year-on-year increase of 3.8%; the average daily pig iron output in April was 2.532 million tons, an increase of 5.02% from the previous month; from January to April, my country’s pig iron output was 306.64 million tons, an increase of 8.7% year-on-year. In April 2021, my country’s steel output was 121.28 million tons, a year-on-year increase of 12.5%; the average daily steel output in April was 4.043 million tons, an increase of 4.55% from the previous month; from January to April, my country’s steel output was 45253 million tons, an increase of 20.1% year-on-year.

In terms of demand, the downstream of the black industry chain are all aspects of economic life, mainly real estate, infrastructure, and machinery, automobiles, home appliances and other industries. After experiencing the impact of the epidemic, these industries have all recovered. Due to the low base in 2020, the data in 2021 is particularly high year-on-year, and there is no significant weakening from the previous month. According to data from the Bureau of Statistics, from January to April 2021, the floor space of newly constructed houses nationwide will be 530.04 million square meters, a year-on-year increase of 22.8%. From January to April 2021, my country’s fixed asset investment completed 1,34804 billion yuan, a year-on-year increase of 19.9%. From January to April 2021, the output of my country’s metal cutting machine tools is 210,000, a year-on-year increase of 57.7%. From January to April 2021, national automobile production was 8.658 million vehicles, a year-on-year increase of 53.4%. It can be said that the belief that policy output will only decrease but not increase directly led to this round of plummet; but from a fundamental point of view, strong demand is still maintained In the short-term, steel prices may be affected by tangled policies and the off-season of demand, or they may fluctuate sharply. However, after the amplitude decreases, downstream demand may restart replenishment, causing steel prices to rise again.

1. Market Review

May rebar futures surged sharply and then quickly fell back. As of the close on May 28, 2020, the rebar 2110 contract fell 458 yuan/ton in May, or 8.50%, to 4933 yuan/ton.

Chart: The main daily K-line of rebar futures

Data source: Master Boyi Guoxin Futures

The spot price of rebar rose and fell. In May, the spot price in Shanghai rose from RMB 5270/ton to RMB 6,120/ton and then fell rapidly to RMB 4770/ton as of May 27. The basis first rebounded and rose slightly.

Figure: Basis of rebar (unit: yuan/ton)

Data source: WIND Guoxin Futures

Looking at the summary of the changes in spot prices, the monthly increase and decrease of Shanghai rebar was the largest decline of -8.4%, the northern part of the decline was smaller, and other varieties had a smaller decline than rebar.

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Chart: Varieties of steel products and futures prices

Data source: My Steel WIND Guosen Futures

The structure of rebar futures presents an N-shape. The main force 10 is still higher than the far-month contract 01, but the 10 contract is also higher than June and July. The main reason is also the impact of the off-peak season of rebar. After the off-season in June, July, and August, it will gradually enter the peak season, but it will return to the off-season in January next year.

Chart: Term structure of rebar futures (unit: yuan/ton)

Data source: WIND Guoxin Futures

2. Supply and demand analysis

(1) Raw material supply

1、iron orestone

From January to April 2021, national iron ore imports were 381.97 million tons, a year-on-year increase of 6.7%. After a substantial increase in iron ore imports last year, the growth rate this year has slowed down slightly, but it still maintains growth.

Chart: Imported quantity of iron ore (unit: 10,000 tons)

Data source: WIND Guoxin Futures

As of May 21, 2021, iron ore port stocks were 125.1 million tons, a year-on-year increase of 14.5%. As of May 19, steel mills imported 16.99 million tons of sintered fines, an increase of 1.2% year-on-year. Iron ore inventories have fallen.

Picture: Iron ore inventory (unit: ten thousand tons)

Data source: WIND Guoxin Futures

2、Coke

From January to April 2021, the cumulative output of coke was 158.62 million tons, a year-on-year increase of 7.4%.

Figure: Cumulative coke production (unit: 10,000 tons) Cumulative coke production year-on-year (unit: %)

Data source: WIND Guoxin Futures

As of May 28, 2021, steel mill coke inventory was 4.256 million tons, a year-on-year decrease of 8.0%, and a month-on-month decrease of 7.2%; port coke inventory was 2.385 million tons, a year-on-year decrease of 30.2%, and a month-on-month decrease of 11.1%; coking plant inventory was 332,200 Tons, a year-on-year decrease of 55.6% and a month-on-month decrease of 56.2%.

Picture: Coke inventory (unit: ten thousand tons)

Data source: WIND Guoxin Futures

The supply of iron ore and coke has both increased, but iron ore is slightly overstocked, and coke inventory is low.

(2) Supply of steel and rebar

1. Profit

As of May 28, 2021, we calculated according to the steel production model, the theoretical profit of the rebar electric furnace was 121 yuan/ton, and the theoretical profit of the blast furnace was -337 yuan/ton. From a month-on-month perspective, the profit of electric furnaces fell by 406 yuan/ton from the previous month, and the profit of blast furnaces fell by 782 yuan/ton. On a year-on-year basis, the profit of electric furnaces increased by 331 yuan/ton over the same period last year, and the profit of blast furnaces decreased by 405 yuan/ton.

Chart: Rebar profit (unit: yuan/ton)

Data source: WIND Guoxin Futures

2. Output

Due to the low base last year and good steel profits. According to statistics from the Bureau of Statistics, the output of crude steel from January to April 2021 was 374.56 million tons, a year-on-year increase of 15.8%.

Chart: Crude Steel Production (Unit: 10,000 tons, %)

Data source: WIND Guoxin Futures

According to statistics from the Bureau of Statistics, the output of steel bars from January to April 2021 is 87.02 million tons, an increase of 16.9% year-on-year.

Chart: Steel bar production (unit: ten thousand tons, %)

Data source: WIND Guoxin Futures

According to data from the Steel Association, key steel companies had 14.68 million tons of stocks in early May, a year-on-year increase of 0.2%. According to data from Shanghai Iron and Steel Union, the social stock of steel was 14.53 million tons, a year-on-year decrease of 9.7%. As steel stocks were affected by the epidemic last year, they were abnormally high; it is normal that this year is lower than last year.

Chart: Steel inventory (unit: ten thousand tons)

Data source: WIND Guoxin Futures

According to data from Shanghai Iron and Steel Union, the social inventory of rebar was 7.81 million tons, and the inventory of construction steel mills was 3.02 million tons, down 11.1% and 11.0% year-on-year respectively.

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Picture: Rebar inventory (unit: 10,000 tons)

Data source: WIND Guoxin Futures

(3) Steel demand

According to statistics from the Bureau of Statistics, from January to April 2021, steel exports amounted to 25.65 million tons, a cumulative rebound of 24.5%.

Chart: Steel exports (unit: ten thousand tons, %)

Data source: WIND Guoxin Futures

According to statistics from the Bureau of Statistics, from January to April 2021, the floor space of newly constructed houses nationwide was 539.04 million square meters, a year-on-year increase of 22.8%. The main reason for the substantial increase in newly started area is that the base figure in 2020 is too low. But it is not as good as the level of newly started area in the same period in 2019.

Chart: New construction area of ​​houses (unit: 10,000 square meters, %)

Data source: WIND Guoxin Futures

According to statistics from the Bureau of Statistics, from January to April 2021, my country’s fixed asset investment completed 1,34804 billion yuan, a year-on-year increase of 19.9%.

Chart: Completed investment in fixed assets (unit: 100 million yuan, %)

Data source: WIND Guoxin Futures

According to statistics from the Bureau of Statistics, from January to April 2021, the output of metal cutting machine tools in my country was 210,000 units, a year-on-year increase of 57.7%. In the same period of 2020, it will be 113,000 units. In the same period of 2019, it was 145,000 units. Metal cutting machine tools are the leading indicators of steel used in the machinery industry.

Picture: Metal cutting machine tools (unit: ten thousand units, %)

Data source: WIND Guoxin Futures

According to statistics from the Bureau of Statistics, from January to April 2021, national automobile production was 8.658 million vehicles, a year-on-year increase of 53.4%, which also exceeded the level of 2019, but not as good as 2018.

Chart: Automobile production (unit: ten thousand vehicles, %)

Data source: WIND Guoxin Futures

Judging from the cumulative year-on-year growth rate of home appliances, the home appliance industry continues to recover. According to data from the National Bureau of Statistics, in April 2021, my country’s air-conditioning output was 24.210 million units, a year-on-year increase of 22.5%; the cumulative output from January to April was 79.396 million units, a year-on-year increase of 39.5%. The output of refrigerators in April was 7.729 million units, a year-on-year increase of 8.5%; the cumulative output from January to April was 29.449 million units, a year-on-year increase of 40.9%. The output of washing machines in April was 7.720 million units, a year-on-year increase of 34.2%; the cumulative output from January to April was 29.167 million units, a year-on-year increase of 44.8%. The output of color TV sets in April was 15.142 million units, a year-on-year increase of 3.6%; the cumulative output from January to April was 58.376 million units, a year-on-year increase of 14.2%.

Chart: Cumulative output of household appliances year-on-year (%)

Data source: WIND Guoxin Futures

According to data from the Bureau of Statistics, my country’s cumulative production of metal containers from January to April 2021 is 63.02 million cubic meters, a cumulative year-on-year increase of 178.5%. The highest level in the same period in history.

Chart: Container Production (m3, %)

Data source: WIND Guoxin Futures

According to statistics from the Bureau of Statistics, from January to April 2021, civil steel ships increased by 22.8% year-on-year to 10.45 million dwt, but less than 11.5 million dwt in the same period in 2019.

Chart: Steel Ship Production (10,000 DWT, %)

Data source: WIND Guoxin Futures

3. Summary and Outlook

Last month, we thought that steel prices were easy to rise and harder to fall, but in fact, after the steel price surged sharply in May, the senior officials began to worry about the excessively high commodity prices, and the steel price dropped sharply. Previously, the market and the Ministry of Industry and Information Technology, which we firmly believe, have cooperated with each other. The National Development and Reform Commission’s policy goal of “decrease but not increase in annual crude steel production” seems to have changed. Judging from the current supply and demand side, policy restrictions on supply exist, but they have not been expanded. Crude steel production still maintains rapid growth, and demand is still relatively good year-on-year. However, from a month-on-month perspective, it has entered a relatively off-season and demand growth has slowed down. slow. However, the current steel price has fallen from the highest point to 1,500 yuan/ton, which has fallen below the cost of steel mills’ blast furnaces, and export profits have increased sharply. Steel prices may fluctuate sharply in June.

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In terms of supply, profits have turned from positive to negative. Previously, high profits stimulated high production. According to data from the National Bureau of Statistics, in April 2021, my country’s crude steel output was 97.85 million tons, an increase of 13.4% year-on-year; the national average daily output of crude steel in April was 3.262 million tons, an increase of 7.6% from the previous month; from January to April, my country’s crude steel The output was 374.56 million tons, a year-on-year increase of 15.8%. In April 2021, my country’s pig iron output was 75.97 million tons, a year-on-year increase of 3.8%; the average daily pig iron output in April was 2.532 million tons, an increase of 5.02% from the previous month; from January to April, my country’s pig iron output was 306.64 million tons, an increase of 8.7% year-on-year. In April 2021, my country’s steel output was 121.28 million tons, a year-on-year increase of 12.5%; the average daily steel output in April was 4.043 million tons, an increase of 4.55% from the previous month; from January to April, my country’s steel output was 45253 million tons, an increase of 20.1% year-on-year.

In terms of demand, the downstream of the black industry chain are all aspects of economic life, mainly real estate, infrastructure, and machinery, automobiles, home appliances and other industries. After experiencing the impact of the epidemic, these industries have all recovered. Due to the low base in 2020, the data in 2021 is particularly high year-on-year, and there is no significant weakening from the previous month. According to data from the Bureau of Statistics, from January to April 2021, the floor space of newly constructed houses nationwide will be 530.04 million square meters, a year-on-year increase of 22.8%. From January to April 2021, my country’s fixed asset investment completed 1,34804 billion yuan, a year-on-year increase of 19.9%. From January to April 2021, the output of my country’s metal cutting machine tools is 210,000, a year-on-year increase of 57.7%. From January to April 2021, the national automobile production was 8.658 million units, a year-on-year increase of 53.4%, which also exceeded the level of 2019, but not as good as 2018. In April 2021, my country’s air-conditioning output was 24.210 million units, a year-on-year increase of 22.5%; the cumulative output from January to April was 79.396 million units, a year-on-year increase of 39.5%. The output of refrigerators in April was 7.729 million units, a year-on-year increase of 8.5%; the cumulative output from January to April was 29.449 million units, a year-on-year increase of 40.9%. The output of washing machines in April was 7.720 million units, a year-on-year increase of 34.2%; the cumulative output from January to April was 29.167 million units, a year-on-year increase of 44.8%. The output of color TV sets in April was 15.142 million units, a year-on-year increase of 3.6%; the cumulative output from January to April was 58.376 million units, a year-on-year increase of 14.2%. my country’s cumulative production of metal containers from January to April 2021 is 63.02 million cubic meters, a cumulative year-on-year increase of 178.5%. The highest level in the same period in history. From January to April 2021, civil steel ships increased by 22.8% year-on-year to 10.45 million deadweight tons. From January to April 2021, steel exports amounted to 25.65 million tons, a cumulative rebound of 24.5%. As export profits improve, exports are expected to continue to increase.

It can be said that the disillusionment of the policy that output will only decrease but not increase directly led to this round of plummet; but fundamentally, strong demand is still maintained, and steel prices are affected by tangled policy and demand off-season in the short-term or may fluctuate sharply, but After the amplitude becomes smaller, the downstream may restart the replenishment demand, causing the steel price to rise again.

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