The average daily iron and water production this Sunday, announced yesterday evening, increased significantly by 117,100 tons to 2.4055 million tons. Due to the complete elimination of production restrictions on important activities, the support role of steel raw materials will also be enhanced.
Yesterday afternoon, Steel Union also released this week's production, sales and inventory data. The rebar data is very bad, and the hot coil data is not bad. It has been mid-September, and downstream demand for construction steel has not yet recovered to the level in early July, resulting in a significant increase in social inventory.
As of September 11, the social inventory of rebar was 4.8723 million tons, which was 1.035 million tons in early August, with a cumulative inventory of 24%. Hangzhou's rebar inventory was even higher than this winter storage period this year. Continue to destock with hot rolls and other plates.
The oversupply of construction steel has resulted in the continuous accumulation of steel inventory, with the highest accumulation in the past five years. As of September 11, the inventory of the five major types of steel was 15.1461 million tons, which was 11.8% from the cumulative inventory of 1.63 million tons in early August, with a cumulative inventory of 11.8%, of which the cumulative inventory of social inventory was 16%.
Macau, Bloomberg reported on September 11 that the Chinese government is considering guiding banks to provide loans to local governments to help them pay off their huge debts of more than $1 trillion owed to private enterprises by 2027.
Source disclosed that the above plan will be implemented in stages, and the first phase is expected to repay at least 1 trillion yuan of defaulted accounts; the official plan is to pay off the debt by 2027.
According to the estimation of a well-known Chinese economist Li Daokui, the total amount of funds owed by local governments to contractors and civil servants reached 10 trillion yuan, equivalent to 7% of China's GDP last year.
The above news has almost no significant impact on the steel market in the short term, but the medium- and long-term impact is relatively large.
In addition, in August, the production and sales of new energy vehicles reached 1.391 million and 1.395 million respectively, an increase of 27.4% and 26.8% year-on-year respectively, and the sales of new energy vehicles reached 48.8% of the total sales of new automobiles.
The demand for hot coils and cold rolling is not light in the off-season, which is closely related to the simultaneous explosion of domestic and foreign demand for new energy vehicles, and external demand will continue to strengthen.
For steel mills, Shagang sharply lowered the price of rebar in mid-September 100 yuan/ton yesterday. In addition, it is expected that the steel mills will make a second round of reduction in coke on September 15.
The overall steel market is running weakly this week, and the suppression of the market is an important reason. The core problem is that the stock market is too hot. Speculative funds originally in the futures market have withdrawn one after another, especially the fundamentals of short-term and medium-term black commodity products are weak, so they are naturally targets for reduction.
Overall, the demand for construction steel did not increase but fell in early September, and the inventory pressure on the steel market was relatively high. Without major negative news, there is limited room for steel prices to fall, and there is expected to be a slight rebound in late September.
