Most alert to the risk of rapid rise in rebar inve

Be alert to the risk of rapid rise in rebar inventory

the recent trend of steel price has fallen back into anxiety. The production restriction of steel mills is still strict, and it is difficult for the commencement and output to improve on the whole, while the terminal demand has also entered stagnation, and the only market focus is on inventory. Because they have optimistic expectations for spring demand and still have confidence in the production restriction policy, traders have a better enthusiasm for hoarding goods, and the winter storage inventory has increased significantly, so the spot price has also been supported. However, at present, the inventory is fast and can't help but say that sensitivity to accuracy is the top priority, which can't be ignored, and the accumulated risk can't be ignored

first of all, environmental protection and production restriction are still strict. As of February 9, the utilization rate of blast furnace capacity of 163 steel plants surveyed by Mysteel was 72.42%, and the utilization rate excluding obsolete capacity was 78.59%. Compared with the peak before production restriction, there was still a decrease of 12%-13%, that is, environmental protection and production restriction still impose strict restrictions on the overall supply. Moreover, in February in North China, it largely decided where this kind of plastic and rubber were used. The haze weather in the region was still serious, and the production restriction was tightened again. In order to get rid of the "top ten" in air quality, Tangshan plans to "normalize" and "refine" the production restriction. Tighter supply has further supported prices and strengthened traders' confidence

secondly, the demand in spring is still worth looking forward to. In the "heating season", the environmental protection production restriction of steel mills should be implemented until March 15 or late March, but corresponding to this, the test pieces are drum shaped after the traditional tightening, and the demand for steel for terminal construction in spring will begin to recover in early March. The mismatch of this time window will cause the expectation that the supply of steel will fall short of demand in the first and middle of March, which is also a main reason why traders are optimistic about the future market and actively store in winter

however, the social inventory of rebar has rebounded rapidly, and risks are also accumulating. According to the statistical data of Mysteel, as of February 21, the estimated total thread inventory in 35 major cities across the country was 8.016 million tons, an increase of 1.895 million tons compared with that before the holiday. The social inventory level of rebar in 35 cities has approached the peak of 8.6 million tons last year, and the inventory will generally remain rising in the two weeks after the festival, and eventually the inventory will rise to about 9 million tons. In 2017, the steel inventory finally went away rapidly, but in fact, there was an obvious gap between steel supply and demand after April due to the crackdown on "ground bar steel". This year, although there is a mismatch period of nearly a month's production restriction and demand recovery, the current inventory accumulation level can theoretically make up for the gap between supply and demand. Subsequently, the resumption of production of the steel plant will drive the supply to rebound significantly. Therefore, under this expectation, the steel price is still under great pressure

finally, real estate investment has fallen significantly at the end of 2017, and this trend will continue this year. With the financial deleveraging, the interest rate remained high, and the interest rate of house purchase loans in many places increased. Therefore, the sales end of commercial housing in 2018 is not optimistic. Infrastructure construction will also be significantly weakened due to the suppression of regulatory policies, especially the strict inspection of local illegal financing by the policy, the inventory of PPP projects will be cleaned up and rectified, and infrastructure investment will be further hit. Therefore, the weakness of real estate infrastructure investment will also drag down the demand for construction steel

to sum up, the accumulation rate of rebar stock exceeded expectations. It is estimated that by the end of March, it is easy to break, and the overall inventory probability increased to a high level equivalent to last year. Although at the beginning of the recovery of terminal demand after a year, the superposition of production restrictions and the expectation of phased accelerated decline in inventory supported the rebound in steel prices and profits, the pressure of resumption of production will be faced after late March, so the current inventory pressure is more vigilant. In addition, the long-term risk of the slowdown of terminal investment growth can not be ignored