1. Price trend
According to SunSirs price monitoring, the prices of medium and heavy plates rose sharply from last week (May 15, 2020) to this week (May 22, 2020). Puzhong Board (Material: Q235B; Specification: 20) The price on May 15 was 3620 yuan / ton, and the price on May 22 was 3682 yuan / ton, up 1.71% from last week. Rainfall will increase in some areas next week, and high prices will also restrict the release of demand. It is expected that domestic plate prices will show a slight downward trend next week.
2. Analysis of influencing factors
Market situation: Boosted by the news of the increase in production restrictions of northern steel mills, Tangshan billets rose sharply over the weekend, driving spot prices to rise overall, with a cumulative increase of up to 80 yuan / ton. However, after the price is raised, the market fears of high sentiment, terminal acceptance is low, and the upward trend of prices has gradually narrowed. This week, with the snail's shock and decline, spot prices surged back down. However, the new phase of the price adjustment policy of the leading steel mills in East China is basically based on the upward adjustment, with an increase of 50-80 yuan / ton. It can be seen that with the strong operation of raw material prices, steel mills have a strong willingness to price. At the same time, this week's building materials social inventories continued to decline, inventory digestion is progressing smoothly, short-term support for steel prices.
Inventory: According to the national inventory statistics, the rebar inventory in 35 major cities decreased by 303,500 tons, the wire rod inventory decreased by 111,700 tons from last week, the hot rolled coil inventory decreased by 20,400 tons from last week, and cold-rolled coils The inventory decreased by 46.47 million tons from last week, and the medium and heavy plate inventory decreased by 19,900 tons from last week. Taken together, the current market demand is slowing and the slowdown in social inventory is slowing down. Although local steel mills' willingness to increase prices has not weakened, it is difficult to predict whether shipments can support high prices.
Supply and demand: The performance of domestic building materials transactions this week is acceptable. Taking East China as an example, the average daily transaction volume has increased from last week. Especially in the first half of the week, boosted by the good news in the macro, the trading atmosphere in the market rose, and transactions were concentrated. In the second half of the week, after the price continued to rise, the market feared high sentiment, the terminal's acceptance of high-priced resources decreased, and the transaction performance weakened. Overall, driven by various favorable policies, infrastructure investment increased and real estate demand picked up. Demand performance will still maintain a certain degree of resilience in the later period, so it has a supporting effect on construction steel prices. However, the rainy weather in East China and South China will be more concentrated next week, which may have a negative impact on transaction performance.
3. Future market forecast
Stimulated by the news of the limited production in North China during the "two sessions", the billet prices of Tangshan in Hebei rose sharply last weekend, and spot prices generally pushed up. As the center of cost shifted upwards, steel mills' willingness to increase prices has increased, and factory prices have been raised one after another, bringing support to rising market prices. However, it is worth noting that the production restriction policy in Hebei has been loosened. This week, domestic steel mills ’construction material output continues to rise, and supply pressures are still increasing. Downstream demand is showing signs of slowing down. After a long period of time, especially after prices have risen, transactions in many places tend to weaken. Overall, the current domestic construction steel market is at the stage of "historically high inventory levels and upward price constraints". Considering the increased rainfall in some areas next week, the high price will also restrict the release of demand. It is expected that the domestic plate prices will show a slight downward trend next week.
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