company news about The market outlook of rebar is easy to rise and difficult to fall

At present, the optimism of the market has gradually recovered. It is expected that the transportation, logistics and terminal operation and production activities in most parts of the country will re-enter the normalization stage from mid-April, and the concentrated realization of demand will boost steel prices.

At present, the contradiction on the supply side of the steel market lies in the limited production capacity of steel mills and the obvious squeeze on profits caused by the high charge price, while the demand side is expected to be strong after the game. Since the problem of charge transportation will eventually be alleviated with the improvement of the epidemic, in the case that steel mills cannot effectively transmit to the downstream, the short-term increase in raw material prices will be too large, and will face a certain degree of correction pressure in the later period. In terms of demand, the previous strong expectations have not been falsified by the market, and April will usher in a centralized cashing window, boosted by this, the overall steel price outlook is easy to rise but difficult to fall. However, we still need to be alert to the risk that demand expectations will fall short under the influence of the epidemic.

Since March, the cumulative increase in steel prices has exceeded 12%, and the performance of iron ore and coke in the charge is even stronger. At present, the steel market is strongly supported by the cost of iron ore and coke, driven by strong demand expectations, and the overall steel price remains high.

From the supply side, the production capacity of steel mills is mainly constrained by the tight supply of charge and high prices. Affected by the epidemic, the import and export process of automobile transportation is more complicated, and it is very difficult for materials to arrive at the factory. Taking the Tangshan area as an example, some steel mills were forced to suffocate their furnaces due to running out of auxiliary materials, and the inventory of coke and iron ore was generally less than 10 days.

Under the circumstance of tight supply of raw materials and poor storage, the price of charge materials represented by iron ore and coke has risen, seriously squeezing the profits of steel mills. According to a survey of steel companies in Tangshan and Shandong, the current profit of steel mills is generally reduced to less than 300 yuan/ton, and some steel companies that are short of charge can only maintain a profit level of 100 yuan per ton. The high price of raw materials forced some steel mills to adjust the production ratio and use more low-grade ultra-special powder or printing powder to control costs.

Since the profits of steel mills are severely squeezed by upstream costs, and it is difficult for steel mills to transfer cost pressure to the consumer side under the influence of the epidemic, steel mills are currently in the stage of attacking both upstream and downstream, which also explains the recent strong price of raw materials but the increase of steel prices. Far less than the phenomenon of charge. It is expected that the tight supply of raw materials for steel mills is expected to ease in the next two weeks, and the prices of upstream raw materials may face some correction pressure in the market outlook.

The future demand for steel is expected to focus on the following aspects: first, the release of demand due to the epidemic; second, the demand for steel from infrastructure; third, the overseas steel gap caused by the conflict between Russia and Ukraine; fourth, the upcoming traditional consumption of steel peak season. Under the previous weak reality, the strong expectations that have not been falsified by the market are mainly based on the above points.

In terms of infrastructure, in the context of steady growth and counter-cyclical adjustment, there are traces of fiscal efforts on the infrastructure side since the beginning of this year. Data show that from January to February, the national fixed asset investment was 5,076.3 billion yuan, a year-on-year increase of 12.2%; the national issuance of local government bonds was 507.1 billion yuan, of which 395.4 billion yuan was special bonds, and the pace of issuance was significantly ahead of last year. Considering that the country's stable growth is still the main tone, and the infrastructure side is imminent, April after the relaxation of epidemic control may become a window period to observe the expected realization of infrastructure demand.

Affected by the conflict between Russia and Ukraine, the global steel export demand has increased significantly. According to recent market research, some steel mills have seen a relatively significant increase in export orders in the past month, and the orders can be maintained until at least May, and the categories are mainly concentrated in slabs with smaller quota restrictions. In view of the objective existence of the overseas steel gap and the difficulty of effectively repairing the gap in the first half of this year, it is expected that after the relaxation of epidemic control and control, the smooth flow of the logistics side will further help the realization of export demand.

Although exports and infrastructure have brought more attention to the steel consumption in the future, the demand from the real estate side is still weak. Although many places have introduced the benefits of lowering the down payment ratio and loan interest rate, from the actual sales transaction situation, residents' willingness to buy a house is not strong, and residents' risk appetite and consumption tendency will continue to decrease, and the demand for steel from the real estate side is expected to be large. Discounted and difficult to cash in.

In summary, under the neutral and optimistic market sentiment, it is expected that the transportation, logistics and terminal operation and production activities in most parts of the country will re-enter the normalization stage from mid-April, and the concentrated realization of demand will boost steel prices. However, under the condition that the real estate slump continues, it is necessary to be alert to the reality that steel demand may face weakness again after the cash-out period.