Rebar is expected to return to the rising trend

2022-05-19
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Rebar: it is expected to return to the rising trend

the domestic economy continues to improve, and the rising prices of raw materials such as iron ore, coke and coking coal promote the continuous rise of rebar futures. On November 28, the news of tightening housing loans in Shanghai hit the black futures. However, under the background of capacity reduction, steel production and inventory are expected to continue to decrease, supporting the spot steel price. Therefore, rebar futures will still return to the rising pattern after a short correction

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industrial investment has improved, but the housing loan policy has been tightened

the domestic economic data in October reflect that investment, industry and other aspects have improved under the continuous effect of a package of portfolio policies. From January to October, China's fixed asset investment increased by 8.3% year-on-year in nominal terms, 0.1 percentage points faster than that from January to September; Private fixed asset investment increased by 2.9% in nominal terms year-on-year, and the growth rate accelerated by 0.4 percentage points. In addition, in order to achieve the goal of steady growth, the national development and Reform Commission has accelerated the approval of many railway construction in recent months, and infrastructure is expected to continue to be a strong support for steel demand

the real estate industry also performed well in October. The development investment, construction area, new construction area and other indicators directly related to rebar consumption improved across the board, the land purchase area of real estate enterprises slowed down, and the land transaction price accelerated. However, in the face of rising house prices, after the tightening of purchase restrictions, a new round of loan restrictions began. On November 28, Tianjin and Shanghai announced the tightening of housing loan policies at the same time. Among them, since November 29, the proportion of down payment for commercial loans applied for the first house in Shanghai has been raised to no less than 35%, the proportion of down payment for commercial loans applied for ordinary self owned houses purchased by the second house (house and loan recognition) has been raised to 50%, and the proportion of down payment for non ordinary self owned houses purchased has been raised to no less than 70%. This new policy has a great impact on a large number of users with replacement demand, which will increase the impact of polluting land resources due to excessive accumulation. In addition, major banks in Jinan will also suspend their mortgage business in recent days. It is expected that the tightening trend of the loan restriction policy is expected to spread to more regions, which will hit the investment willingness of real estate enterprises in the later stage and the consumption of rebar in the second half of 2017. It is also the main reason for the sharp decline of rebar and other black futures recently

the US dollar is relatively strong, and iron ore has risen sharply

since November, the futures price of iron ore has risen sharply, and the spot price has also risen. The 62% grade price index has risen from US $64.7/ton on October 31 to US $80.4/ton on November 14, but US $80/ton has greatly exceeded the psychological price of steel mills. With the continuous decline of iron ore futures, the 62% grade price index also fell to $72/ton. However, 85% of China's iron ore needs to be imported. When the US dollar began to rise continuously relative to the RMB, it played a strong support for the spot price. At the same time, the continuous rise of rebar prices also makes steel mills willing to accept high-priced mines, especially high-grade mines with tight supply in the near future

on November 28, the 62% grade price index rebounded to $80.83/t, a sharp increase of $16.1/t over the end of October, an increase of 25% in one month. At present, the benchmark price of spot iron ore converted into futures in northern port is about 7. In terms of cost performance, it is 05 yuan/ton, which is 80 yuan/ton higher than the contract premium of 1701 iron ore. In the later stage, the relative strength of the US dollar is expected to continue. Coupled with the substantial discount of futures, iron ore is expected to maintain a strong pattern, which will also support the return of rebar to the rising pattern

coal coke is strong and difficult to change, and the cost of steel is supported

first, since April, the 276 day working day plan has been fully implemented in domestic coal mines, especially in state-owned coal mines, which is very strict, resulting in the rapid reduction of coal output; Secondly, this year's environmental protection supervision has been significantly strengthened, and the operating rate of coking enterprises has decreased; Finally, since late September, the costs of roads, railways and sea transportation have increased in an all-round way. Driven by multiple positive factors, the spot prices of coking coal and coke continued to rise

in the later stage, although the national development and Reform Commission requires advanced coal mines to release production capacity, these new production capacity are mainly power coal, the actual increase of coking coal is limited, the recent supply of foreign coking coal resources is tight, coupled with the peak power consumption in winter, the state will give priority to ensuring the transportation of electric coal, and the transportation capacity of coking coal in the later stage will be affected to a certain extent. Therefore, the spot prices of coke and coking coal will remain strong, which forms a solid support for the cost of rebar

loss + environmental protection limited steel production or decline

since late September, the prices of iron ore, coke, coking coal and other raw materials have been rising, the production costs of steel mills have increased significantly, and nearly half of steel mills have changed from profit to loss. According to the survey of Shanghai Steel Union, in late November, only 53% of steel mills still made profits, and many steel mills lost more than 200 yuan per ton of rebar. The increased losses hit the production enthusiasm of steel mills, and the number of steel mills overhauling blast furnaces began to increase. The average blast furnace operating rate of 163 steel mills counted by Shanghai Steel Union fell to 76.8% in mid November

in addition, Tangshan, Hebei, has repeatedly issued short-term production restriction policies. By March 15, 2017, key industries such as steel and coking will stop production at staggered peaks; Henan, Shanxi and other provinces have also launched a number of pollution control measures; Shijiazhuang announced that by the end of this year, all seven major industries such as steel will stop production. Judging from the current weather conditions in China, the haze is still quite serious, which means that the steel output is expected to continue to decrease in the later stage, which brings strong support to the spot of rebar

based on the above analysis, December is the traditional off-season of rebar consumption, but steel mills continue to limit production, reduce steel output, keep inventories at a low level, and the spot prices of coke, coking coal and iron ore are strong, providing strong cost support for steel mills. Although the tightening of housing loans and the implementation of trading quota system for rebar futures will make rebar futures callback in the short term, it will still oscillate upward in the medium term

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