Weekly Review
Supply Aspect: This week, the supply of the five major steel grades was 8.8399 million tons, a decrease of 50.2 thousand tons from the previous week, a drop of 0.6%. Among the five major steel grades, the production of rebar and hot rolled coil decreased significantly. The core driver is that due to increased losses in steel mills, some steel mills have stopped production for maintenance and have started to sell steel billets.
Inventory Aspect: This week, the total inventory of the five major steel grades was 17.5722 million tons, a decrease of 155.9 thousand tons from the previous week, a drop of 0.9%. This week, the total inventory of the five major varieties all decreased: the factory inventory decreased on a weekly basis, with the main reduction coming from rebar contributions. The social inventory also decreased on a weekly basis, with the increase also mainly coming from rebar contributions.
Consumption Aspect: This week, the weekly consumption volume of the five major varieties was 8.9958 million tons, an increase of 0.4% from the previous week; among them, the consumption of building materials increased by 0.2% month-on-month, and the consumption of plate increased by 0.5% month-on-month. This week, the apparent consumption of the five major varieties showed an increase in both building materials and plates, indicating that demand still has resilience in the off-season.
Outlook for Next Week
Currently, several steel mills have issued announcements for the replacement of new and old national standards for rebar steel. The production side may gradually implement the production of new national standards in the later period. However, due to the large inventory pressure in some areas, the market is worried about the dumping of goods by steel mills and traders, and liquidity issues may form a negative feedback on market prices, causing overall steel prices to bear pressure. In terms of the basic side, although the production of steel mills has decreased, the speed of decline is slow, and the iron water is still at a high level. It is difficult to see a significant growth point on the demand side in the later period, and the basic side still maintains a weak pattern. However, the important meeting is about to end, and the market may be greatly disturbed by the news, and it is necessary to pay attention to whether there are any unexpected events in the near future. In general, **in the period when the basic side is still weak and the new and old national standards are alternating, the price is under pressure to rise sharply, but it is still necessary to pay attention to whether the important meeting releases unexpected favorable policies.**
Basic Side Interpretation
According to Mysteel statistics, in terms of rebar, the output of rebar steel continued to decrease this week, with a total reduction of 37.5 thousand tons, and both long and short enterprises have reduced their output. Looking at the regions, except for the southwest and north China, the output in other regions is decreasing. Among them, the output in the east China region decreased the most, mainly because some steel mills in Jiangsu stopped the rolling line and sold steel billets; in addition, Guangdong and Heilongjiang also had a large reduction in output due to the shutdown of electric furnaces and the adjustment of production varieties. In terms of wire and coil, the output of this week increased from a decrease to an increase, with a total increase of 15.9 thousand tons. Looking at the regions, the increase is mainly concentrated in the northeast region, where Heilongjiang increased the supply by 21.8 thousand tons due to the resumption of production line repairs, and the output fluctuation in other provinces is less than 10 thousand tons, basically the same as last week. In terms of hot rolled coil, the output of this week decreased, and the actual output of the steel mill was 3.2702 million tons, a decrease of 44.6 thousand tons from the previous week; the main reduction was in the north China region, mainly due to the production line maintenance of SG.
According to Mysteel statistics, in terms of rebar, the factory inventory continued to decrease this week, but the decline narrowed, with a total reduction of 20.1 thousand tons, and the factory inventory in east China, south China, and southwest all decreased. With the recovery of demand in east China and the south, the factory inventory in Fujian, Yunnan, Guangxi, Jiangsu, Guangdong, and other provinces all decreased, and the consumption of building materials in the northern region weakened, and the factory inventory in north China and northeast China increased slightly. In terms of wire and coil, the factory inventory this week changed from an increase to a decrease, with a total reduction of 32 thousand tons. Looking at the regions, except for the northeast and northwest, the inventory in other regions has decreased to varying degrees, with the largest reduction in north China, where Shanxi and Guizhou combined to reduce the inventory by 29 thousand tons, while Sichuan has high temperatures and rainy weather, the shipment is not smooth, and the inventory increased by 12.5 thousand tons, and the inventory in other provinces fluctuates slightly. In terms of hot rolled coil, the factory inventory decreased slightly from last week, and the steel mill basically shipped normally.
According to Mysteel statistics, in terms of building materials, taking rebar steel as an example, from the three major regions, east China and the south decreased by 63.2 thousand tons and 23.3 thousand tons respectively on a weekly basis, while the north increased by 26.8 thousand tons on a weekly basis; from the seven major regions, except for central China, north China, and northeast, other regions all showed a state of reducing inventory. In terms of hot rolled coil, from the three major regions, east China and the south increased by 12.8 thousand tons and 1.3 thousand tons respectively on a weekly basis, while the south decreased by 22.7 thousand tons; from the seven major regions, except for east China and south China, other regions all showed a state of reducing inventory. According to Mysteel statistics, this week's total inventory of the five major varieties was 17.5723 million tons, a decrease of 155.8 thousand tons from the previous week, a drop of 0.9%. Among them, the inventory of building materials decreased by 138.8 thousand tons on a weekly basis, a drop of 1.5%; the inventory of plates decreased by 1.7 thousand tons on a weekly basis, a drop of 0.2%. The total inventory of the previous period was 17.7281 million tons, a decrease of 0.4% from the previous week. Among them, the inventory of building materials decreased by 111.3 thousand tons on a weekly basis, a drop of 1.19%; the inventory of plates increased by 39.5 thousand tons on a weekly basis, an increase of 0.47%.