The hottest rebar still lacks the power to rise sh

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Rebar still lacks the momentum to rise sharply

since Shanghai rebar futures hit the bottom of 4000 yuan/ton on May 23, the futures price of rebar has followed the overall rebound trend of the commodity market and maintained a slight slow rise. Recently, the main contract rb1210 has stabilized above 4100 yuan/ton. Due to the first interest rate cut by the central bank in more than three years in early June and the satisfactory results of the Greek parliamentary election in the euro zone, the current market sentiment is gradually optimistic about the future. On the one hand, with the gradual easing of capital, house prices have remained low for several months and rebounded, and the warming expectation of the real estate market is gradually strengthened; On the other hand, the speculation in the euro zone was temporarily subsided due to the Greek election results, and crude oil was supported at $80. Therefore, in theory, the rebar futures price has reason to continue to rebound, but from the actual situation of the current fundamentals, rebar still lacks the power to rise sharply

first of all, since this year, the capacity expansion has been too fast, but the utilization rate of capacity has been declining in high and low temperature experiments, and the problem of oversupply has been intensifying. According to the statistics of the iron and Steel Association, the annual output of crude steel in China in 2011 was 680 million tons, with a capacity of 840 million tons, and the capacity utilization rate was only 81.46%; In 2012, China's crude steel production capacity increased by more than 80million tons, and the annual crude steel production capacity exceeded 920 million tons. According to the production of 290 million tons in the first five months of this year, the capacity utilization rate has actually further declined to less than 80%. As long as the capacity utilization rate does not go up, it means that there is still a lot of room for supply to rise. Once the price rises significantly, there is bound to be greater output to promote the price to decline again. Moreover, due to the slowdown of economic growth, external demand is not awesome, and the growth rate of apparent steel consumption is slower than that of output. Although with the gradual decline of economic growth and the reduction of inflationary pressure, "stable growth" has gradually become the focus of the government's work. In the later stage, a series of major project investment and construction is expected to accelerate, and the monetary policy also tends to be moderately loose, with the unwavering real estate regulation policy, the pull of infrastructure investment on steel consumption is also difficult to make up for the decline in real estate market demand, and the overall consumption is difficult to rise significantly. Therefore, the enterprise has only three production lines, and the pattern of excess supply is difficult to effectively improve

secondly, the steel charge price is weak with the steel price fluctuation, and the cost is lack of strong support. From the perspective of iron ore, although the price of imported iron ore has rebounded slightly in recent months, in the medium and long term, the downward probability of ore price is still high. On the one hand, the new production capacity of the three major foreign mines will be released from 2012 to 2013. In addition, more than 300 iron ore mining projects in more than 40 countries are under construction and planning, which is expected to form an ore production capacity of more than 1.6 billion tons, with an increase of 380million tons in 2013. With the loosening of the ore market, the sources of imported ore in China are also gradually diversified. Yi Chengxin, a non mainstream mine, can raise funds to invest in the project. The import volume of the project is increasing, and the monopoly degree of the ore market is declining, which makes the price inevitably form competition, and the ore price is difficult to maintain a high level. At the same time, due to the weak domestic steel price, all major steel mills have reduced ore inventories. Therefore, at present, the iron ore in domestic ports has been at a high level, which also makes it necessary to reduce the ore price only by replacing the sensor in the short term. From the perspective of another major upstream coke, in the past three months, coke prices in most parts of China have fallen sharply. Overcapacity is still an important factor in the weakening of coke prices, but there is also a very important point that, compared with steel mills, coke enterprises are in a weak position in negotiation. Due to the low steel prices and poor profitability, steel mills have been able to maintain the pressure on coke prices since this year. Therefore, both iron ore and Coke will remain weak in the later stage, and the price rise will also lack momentum

from the perspective of the overall market, in the short term, after entering the plum rain season, it will enter the off-season, steel mills will carry out large-scale maintenance, and supply and demand may fall back, so the price fluctuation of rebar will not be affected much. On the whole, due to weak fundamentals, it is still difficult for steel prices to change the current weak shock pattern in the late stage, and the rebound is difficult to continue

(Shanghai Securities News)

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