News summary
Rebar production rose slightly this weekultimatexbonuspokerstrategy, consumption is resilient, demand is picking up, but overall it is still weak. Inventories decreased, but molten iron profits were under pressure. Iron ore prices are supported by costs, while steel prices are strong, so it is recommended to hold more orders. Focus on macro demand, real estate data and export risks.
Newsletter text
[Rebar output increased slightly this week, and market consumption expectations continue to recover]
Weekly summary shows that the total output of rebar this week reached 2.34 million tons, up 1.1% month-on-monthultimatexbonuspokerstrategy..3%, and the cumulative output was 43.734 million tons, a year-on-year decrease of 19.9%. At the same time, long-process output was 2.05 million tons, a month-on-month increase of 1.2%, and short-process output increased to 280,000 tons, a month-on-month increase of 2.1%.
The increase in output in the steel production sector indicates a continued recovery in capacity utilization. Market analysts expect that molten iron supply will continue its growth trend in the next two weeks. On the one hand, steel consumption is gradually entering the peak season, and demand will show greater resilience; on the other hand, supply elasticity may weaken after the resumption of production. However, as the supply of molten iron is close to the expected 2.4 million tons/day, it is necessary to pay attention to the downstream market's response to inventory accumulation and sales.
[Threaded watches need to grow month-on-month, and the market shows consumption elasticity]
In terms of demand, the demand for thread watches this week was 2.91 million tons, a month-on-month increase of 11.1%. Cumulative demand still fell by 19.7% year-on-year, indicating a rapid recovery in market consumption. Although cumulative demand remains weak, the margin of demand for construction steel is expected to gradually improve with the implementation of multiple policies.
[Billet imports are stable, and inventories fall month-on-month]
Import data showed that the import volume of billet in March this year was 176,000 tons. In terms of inventory, social stocks of thread this week were 6.13 million tons, a decrease of 7.2% from the previous week, and factories and warehouses also dropped from 2.23 million tons to 2.14 million tons, a month-on-month decrease of 4.1%. Overall inventories fell to 8.27 million tons, a month-on-month decrease of 6.4%.
[Costs and profits are both under pressure, and the market is volatile and expected]
This week, the cost of molten iron was 3087 yuan/ton, and the profits of blast furnace and independent electric arc furnace steel mills were-203 yuan/ton and-284 yuan/ton respectively, indicating that both production costs and profits are under pressure. Basis data shows that the minimum basis for warehouse receipts is-136 yuan/ton, and the basis ratio is-3.8%.
Based on this week's macro data analysis, domestic market demand is still weak, although the recovery of production has not brought about a significant increase in total demand, mainly due to residents 'pessimistic expectations for the economic outlook. Although the real estate market has improved month-on-month, the overall situation is still poor. The judgment of excess steel market remains unchanged, and steel consumption cannot support its valuation, so steel mill profits may be under pressure for a long time.
Against the background of rising molten iron production, iron ore prices are expected to be supported, and steel prices may remain stable driven by costs, causing a volatile market. The market recommends maintaining a multi-stock shareholding strategy, and at the same time, we need to be wary of the possible seasonal decline in hot iron production in June and the potential collapse of steel demand.