Turning My Steel Network-May Steel Market Forecast Report
發(fā)布時(shí)間:[2019-5-5 11:9:52] 瀏覽量:2031次
Brazilian mines are producing more than expected, the tone of macro-control changes, May steel market can go up?
The first half of April and the second half of the market contrast is obvious, what are the main reasons?
The reasons for the strong performance of the steel market in the first half of April are:
First, the published macroeconomic data show that the economy grew significantly better than expected in the first quarter. The government's early stimulus policies began to work and the market mentality improved significantly. Steel social stocks continued to drop significantly, indicating that terminal demand is accelerating the release.
Second, with regard to the continuous strengthening of production production in Brazilian mines, Vale announced annual production plan data, Rio Tinto and BHP Billiton announced that they had suffered force majeure after the Australian hurricane, and the price of mines was strong;
Thirdly, VAT relief was implemented from April 1. The suppressed transactions were concentrated at the end of March, and the market transactions were hot, driving steel prices up.
In the second half of April, the steel market entered the adjustment. The main reasons are:
First of all, the price rise in the early period is too fast and fierce, and the market has the need to callback and repair; Second, the Brazilian government agreed to the resumption of production at the Brucutu mine in Vale, which has an annual production capacity of 30 million tons and is of great importance in the closed mines. Its resumption date is significantly earlier and its confidence in the bears is a major setback. More importantly, on the second day after the release of macroeconomic data, the Politburo held an economic work meeting to show that the guiding ideology of the government's economic work has changed from achieving stable growth in the short term to long-term structural transformation.
The macroeconomic data in the second and first quarters are generally better than expected. Will the central macroeconomic policy turn in the near future?
Judging from the announcement of the Economic Work Conference of the Political Bureau of the Central Committee, the government has undergone a relatively large change in the tone of macro-control. It has changed from short-term growth to structural adjustment and economic transformation, de-leveraging, real estate regulation, and greater reform and opening up. The government will implement manufacturing priorities and focus on supporting the private economy and small and medium-sized enterprises.
However, because the current economic foundation is not firm, the manufacturing industry is still relatively poor, and the small and medium-sized enterprises and the private economy still face major difficulties. Macro-policy will not turn round at a sudden, and there must be a transitional process in the middle. It is expected that the second to third quarters will be a critical period for the traditional kinetic energy represented by real estate investment and infrastructure investment to the dynamic energy represented by manufacturing investment, private investment, and consumption. Active fiscal policy will be maintained in the future, and monetary policy will be moderately tight. In May and June, it will be a period of relaxation and a wait-and-see period for government policies.
What is the situation of steel supply and demand in March and May?
Demand is growing in April, supply is growing, supply and demand is generally balanced, and we expect this to continue in May, when the steel market as a whole will show high output, high demand, low inventory, and there will be little contradiction between supply and demand in the short term.
In terms of building materials demand, the contribution of infrastructure and real estate to the growth of steel demand in the second quarter is still relatively large, and real estate investment continues to maintain a high level, and there will be no significant decline in the short term; In the context of the policy orientation of infrastructure replenishment and the accelerated issuance of local special debts, the ratio of infrastructure investment continued to rebound, and it is expected to rebound to 8 % in the second quarter.
In terms of manufacturing steel, engineering machinery will maintain high growth, while the production and sales of home appliances will maintain a moderate growth, and the decline in car production and sales will also be narrowed. Value-added tax reduction is most beneficial to downstream manufacturing industry, helping steel companies reduce raw material costs and capital occupation, and pulling demand for steel.
Supply pressures on steel are still rising as demand picks up. National steel production has continued to grow rapidly even during the heating season as environmental restrictions have eased since September. After the end of the northern heating season on March 15th, Beijing-Tianjin-Hebei and the surrounding steel mills and the plains steel mills gradually began to resume production in the near future. At the same time, due to the increase in the price of steel in the spot market, electric furnace Mills began to make profits, and the operating rate rose significantly. Recently, Hebei tangshan, Handan wu'an, Shanxi linfen and other key steel production and Coke production areas have issued the second and third quarters of non-heating season environmental production restriction program. In the past, the market has not expected high production limits.
However, we should see that due to the improved economic situation, the pressure on trade and trade between China and the United States has eased, and environmental protection has been raised to an important position. The intensity of the Environmental Protection of steel production will be strengthened compared with the previous period, and the production capacity of steel mills will be released.
Fourth, the long material is strong, the plate is weak; Will hot rolling and cold rolling continue in May?
In April, the building materials were slightly stronger than the plates, and cold-rolling was the weakest of all varieties. This trend is expected to continue in May and June. The main reason is that real estate will remain high, infrastructure will rebound significantly, and the demand for building materials will have a relatively large pull effect. The manufacturing industry is relatively weak, and automobiles and home appliances will also be relatively weak.
May, May iron ore, Coke and other raw materials markets will have any changes?
The surge in iron ore prices caused by the Brazilian mine disaster is a significant change in the steel market this year and will continue throughout the year. Therefore, the supply of iron ore needs constant attention. Due to the faster than expected resumption of production in the Vale mine, coupled with the rapid release of domestic and non-mainstream mines due to the rapid increase in mine prices, the current iron ore price is overestimated and there is a need for a correction later. However, considering the impact of the mine disaster on supply is relatively large, iron ore prices will remain high in the near future, will not rise in the short term, and will not fall sharply.
In terms of coking coal and Coke, due to the Environmental Protection restrictions in the coke industry, the release of coke production capacity is also relaxed. Kucungaoqi, although the coke plant is brewing to raise prices, it is difficult for Coke prices to appear in the short term. Obviously pull up the market. The coke market will still largely follow the steel market.
How does the international situation and the progress of China-US trade negotiations affect the steel market in June, May and June?
In the recent past, the global economy has been mixed: the European Union and Japan have fared worse than expected, while the US has fared better than previously predicted. Despite poor consumer performance on the demand side, investment, exports, and government consumer spending and investment all performed well, boosting the economy, resulting in a 3.2 % GDP growth in the first quarter, which exceeded market expectations. In the future, the U.S. economy is expected to be robust in 2019, with no recession. Meanwhile, the Fed is unlikely to raise interest rates for the rest of the year, which is good for global commodity markets. In addition, the agreement between the United Kingdom and the European Union on the extension of the British Brexit, the deadline was postponed until October 31, and the risk of a hard Brexit was eliminated in the short term. This is a relatively good thing for the EU and the British economy.
Sino-U.S. trade talks are still under way, and the two sides are more likely to reach an agreement in the first half of the year. Problems in the United States themselves have led to a shift from aggression by Mr Trump and the Fed, and the external environment for our country has improved. But the US is not expected to eliminate the 10 per cent tariff imposed on China's exports last September. The impact of the tariff imposed on China's commodity exports will be further reflected.
What was the trend in the steel market in July and May?
In view of the fact that the demand will continue to be boosted by the stabilization of growth policies in the early stages, macro-control policies will not be turned in the short term, environmental production restrictions will be tightened gradually, and high-priced mines will also inhibit the release of production capacity. In the short term, the supply and demand of steel will basically balance. The steel is still in the inventory phase.
With that in mind, we expect the steel market to continue its upward trend in May, and this trend is expected to continue into June. In the second half of the year, the steel market as a whole will be significantly weaker than in the first half. Starting in July, the steel market will enter a small downward channel and will accelerate in September and October.
