Steel community "nine consecutive drop" winter storage also need to wait

After entering the fourth quarter, with the arrival of rain and snow weather, leading to outdoor construction in some areas of the north, steel demand fell.And steel social inventory will also appear seasonal recovery, but this year's market is some "abnormal", steel social inventory still maintain the trend of decline, has now appeared "nine consecutive drop".

Since December, steel society inventory fell further.According to the monitoring data of the platform, on December 11, 2020, the social inventory of 29 key cities was 8.141,000 tons, a decrease of 513,000 tons or 5.93% from the previous week, which was 1.09 percentage points faster than that of the previous week.That was down by 10.5 per cent, or 955,000 tonnes, from the end of last month.At present, the steel social inventory has appeared "nine consecutive drops", a cumulative decline of 5.616 million tons, a decline of 40.82%;It has dropped 14.983,000 tons, or 64.79%, from the year's peak.

At the same time, the inventory of steel mills also showed a synchronous decline. On December 11, the inventory of steel mills in the main regions of the country was 4.252 million tons, 167,000 tons less than the previous period, 3.8% lower than the previous period.Except for Fujian and the southwest, other regions showed a downward trend, among which Shandong, Henan and Hebei showed a significant decline, indicating that the demand resilience is still in place.At present, the rising cost is expected to promote the release of the downstream users' stocking demand, which makes the social inventory of steel in the later period have further room to fall back, and the inflection point of social inventory may be delayed.

The continuous decline in inventories is not unrelated to demand.Into December, the northern steel demand has entered the seasonal off-season, but the southern region terminal procurement demand is still relatively strong.Steel demand remains strong in eastern and southern China, and the pace of destocking accelerated again last week after slowing.Last week's surge in steel prices was mainly from the demand side and capital operations, in the winter rush to the end of demand, meet the delivery of capital disruption, the market is not surprising.But it is worth noting that this week, the country will usher in rain, snow, wind weather, which will have a certain impact on the downstream construction enterprises, steel demand will fall later.

In addition, the recent price of raw materials has also continued to rise.Since the end of October, the price of iron ore has been playing the "crazy stone" again. The price of its main futures contract has been soaring. Last week, it exceeded 1,000 yuan per ton, hitting a new high in nearly seven years.The spot price of iron ore has also broken the 1000 yuan mark. According to the monitoring data of the platform, the iron ore price of Rizhao Port was 1040 yuan/ton on December 14, 2020, which has broken the highest record of nearly six years.In addition, the price of bifocals has soared, recently set a new high for the year.

Under the condition of the raw materials repeatedly squeezing profit margins, steel mill's price will more and more intense, baosteel first raised ex-factory price in January next year, the highest rise as high as 800 yuan, the river is also an increase in the price of building materials, steel, steel and other steel plant to weekend in north China, east China, south China, southwest, northwest, northeast, steel mills have to join the army of pricing, especially in the day and settlement sensitive steel mills.

Steel prices are still at a higher level.According to the platform, according to the monitoring data on December 14, domestic top ten key cities tertiary rebar (Φ 25 mm) the average price is 4089 yuan/ton, up from last week 89 yuan/ton.Today, the futures price has a relatively large drop, the previous rebar futures main contract fell concussion, closed at 3988 yuan/ton, down 120 yuan/ton, a decline of 2.92%;But the current price is still higher than 96 yuan/ton on the first day of December.

Under the current situation, is there any chance of winter storage this year?The first round of winter reserve policy in northeast China was launched this week, but judging from the current market, it seems a little early to talk about winter reserve.It is certain that the current price of winter storage is not realistic. Considering the optimistic market expectation next year, the winter storage price of 3500-3600 yuan in previous years may be difficult to be realized after the Spring Festival is postponed, which may be higher than 1200YUAN, and the winter storage market will be slightly delayed.As a result, there is still room for prices to fall, but it is hard to see how they can hit bottom.

The recent high steel price too fast, at any time facing a callback;The risk of a fall in steel prices between December and January is greater.Therefore, it is recommended to gradually reduce the inventory level to prevent and control risks, while the operation of winter storage still needs to wait.