Steel Weekly Analysis

This week's disk review:

Rebar main contract Rb1301 fell all the way this week, and the decline was significant. Due to the strong pressure at the top, although the beginning of the thread contraction Masukura down, the stock fell below the 3600 line, but its support is strong, 3600 lost and recovered, due to large long and short divergence, the market in a narrow range near the 3600 line fluctuate, the trend is relatively weak However, due to the pressure on the 5-day moving average on Wednesday, as the price of raw materials continued to move downward, resulting in weaker cost support, the market encountered short pressure in the afternoon, thread diving, pessimism intensified, but due to the initial value of HSBC PMI in August At the new low of 9 months, the market activity was extremely active, and the bearish sentiment was strong. Although the market rebounded, due to the main empty singles, the rebound was weak. At the weekend, the price fell to the 3500 line and temporarily gained support. Mitigation, as of today, the thread has fallen for seven consecutive days, the volume of transactions at the weekend has dropped sharply, and the positions have fallen slightly. The daily KDJ indicator has remained downward. The daily MACD indicator has declined and the opening has been enlarged. The weekly K line has barely received a large amount of light. Yinxian.

August 20 rebar main contract Rb1301 opened 3527, the highest 3533, the lowest 3507, closed at 3509 yuan / ton late, trading volume 1144222 hand positions decreased by 5,036 hands.

This week's breaking news:

HSBC Manufacturing PMI fell to 47.8 in August and August, hitting a nine-month low. The data released by HSBC Holdings on Thursday (August 23) showed that China's manufacturing activity shrank sharply in August and hit a new low of nine months; among which, the sub-index new export order index fell to 41 months point. A PMI above 50 indicates that the activity in the relevant area is in an expanded state, while a level below 50 indicates a contraction.

2. The scale of reverse repurchase this week reached 365 billion, and it is expected that the RRR will be severely divided. This week, the scale of reverse repurchase has reached a record 365 billion yuan. The amount of funds released is close to the level of the one-off reserve ratio, which undoubtedly drastically reduced the expectation of a strong RRR cut. However, the discussion on whether or not to lower the level of accuracy will probably not end up being dispersed. The huge amount of reverse repurchases that are about to expire will still require the central bank to make a difference, and policy tools still face choices. After a brief ebb, the market is expected to be severely divided.

3. The State Council: The "Twelfth Five-Year Plan" eliminated 48 million tons of iron and steel production capacity. According to the news published on the 21st of the Chinese government's website, the State Council issued the "12th Five-Year Plan for Energy Saving and Emission Reduction," which requires all localities to implement it conscientiously to ensure energy conservation and reduction of 670 million tons of standard coal during the 12th Five-Year Plan period. aims. In order to eliminate backward production capacity, the "planning" requires the elimination of 20 million kilowatts of small thermal power plants, 48 ​​million tons of ironmaking capacity, 48 million tons of steelmaking capacity, 370 million tons of cement production capacity, 42 million tons of coke production capacity and 15 million tons of papermaking capacity.

4. This week, Anshan Iron and Steel, Shagang, Hebei Iron and Steel Group, Benxi Iron and Steel and other steel companies introduced a new pricing policy on the basis of the previous price policy. They are as follows: Angang lowered its HRC by 250 yuan/ton in September; 100 yuan / ton; cold rolled down 150 yuan / ton; Shagang rebar prices unchanged in late August, the high line down 10 yuan / ton, disk screw down 30 yuan / ton; Hegang in late August the price of building materials remain unchanged, In September, the mainstream specifications of plates were lowered by 250-300 yuan/ton; Bengang's products were lowered by 150-250 yuan/ton in September. For more information, please pay attention to the “Steel Plant Price Adjustment” section of China Steel Net Steel Channel.

5. China Steel Association: The fourth quarter of steel industry and the first quarter of next year will be even more difficult. Wang Xiaoqi, vice president of the China Iron and Steel Association, said on the 23rd that despite the fact that it is currently one of the most difficult periods in the steel industry, the external environment for the steel industry to accelerate industrial adjustment and achieve industrial upgrading has basically taken shape.

6, many ministries and commissions to introduce new policies to promote consumption during the year. In the context of the persistently low external demand, the pro-consumption policy will make further efforts and actions in the year. Recently, it was learned from the industry that various ministries and commissions such as the Ministry of Commerce and the Ministry of Industry and Information Technology were intensively mapping out certain areas related to consumption, and conducted feasibility assessments and evaluations of the relevant incentive policies. It is expected that the intensive launch of the New Deal will be ushered in during the year, and there may be policy encouragement in areas such as credit consumption.

7. The local version of the industry plan is intensively promulgated, with 7 trillion investment plans announced in 50 days. Recently, the local version of the industry plan has been introduced in an intensive manner, involving a trillion yuan in investment. Market participants pointed out that a new wave of investment led by local governments is coming. According to incomplete statistics, the local investment plan announced since July involved an amount of about 7 trillion yuan. Analysts believe that these plans put forward the advantages of local factors, through the creation of local specialty industries to cultivate new economic growth points, investors can find new investment themes from the local version of the industry planning.

In August and July, global crude steel production increased by 2.0% to 130 million tons. According to statistics published on the 21st by the World Steel Association, the world’s 62 major steel-producing countries and regions in July produced 130 million tons of crude steel, a year-on-year increase of 2.0%. The data also shows that the capacity utilization rate of the 62 major steel-producing countries and regions in July dropped from 80.4% in June to 78.7%, which is a decrease of 0.8% compared with the same period of last year.

9. Minutes of the Fed meeting: Several directors supported the recent adoption of QE3. In the early morning of August 23, Beijing time, the Federal Reserve announced the minutes of the latest monetary policy meeting on Wednesday. The minutes show that several Fed governors stated at the meeting that unless the U.S. economy shows signs of a long-term recovery, it will probably need to take more economic stimulus measures in the near future.

10. In the new round of European debt negotiations, Greece has become a key issue. The summer vacation is not over yet. Leaders of the major countries in the euro zone will start a new round of negotiations on the European sovereign debt crisis this week. Whether the major international aid agencies have relaxed their tightening demands on Greece and provided additional assistance has become the focus of attention. It is also a topic of concern to the market whether Spain and Italy offer comprehensive relief to the EU.

This week's market review:

1. Market: As of August 24, the average price of 16-25mm rebar in 24 domestic cities was 3,617 yuan/ton, down by 59 yuan/ton from the same period last week, of which, the Beijing building materials price was 3420 yuan/ton. In the same period last week, it fell by 120 yuan/ton. Shanghai building materials prices were at 3530 yuan/ton, down 60 yuan/ton from the same period last week, and Guangzhou building materials prices were at 3770 yuan/ton, down by 40 yuan/ton from the same period last week. This week, the price of domestic building materials has fallen significantly. Some markets have low-cost resource shipping preferences. However, due to the end of the month, businesses are eager to pay back orders, shipping intentions will increase, the willingness to cut prices will increase, the price will decline, and the business mental defense will be Breaking down, with the decline in shipping business increased. It is reported that the current downstream purchase intention is still not strong, the demand is weak, and the construction site utilization rate is low, which directly affects the transaction volume, and the downstream has not improved, and the market may continue to slump. In addition, the continuous decline in building materials prices this week in addition to demand, but also with the market large individual stocks larger, eager to reduce the inventory to close the relationship, in their lead, price reductions, so that the stock market this week There has been a decline. In addition, the continuous decline in raw material prices has weakened the cost support and exacerbated the pessimistic mentality of businesses. However, in North China, affected by the call from the steel mills and Hebei Iron & Steel will issue the settlement price policy of building materials in August, the price decline will slow down, but the wait-and-see attitude is strong. On the whole, if there is no good information support, it is expected that prices of construction materials will continue to fluctuate in the next week in the face of weak demand.

2, inventory analysis:

Rebar stocks change in major cities across the country (12.8.17-12.8.24) (Unit: 10,000 tons)

Inventory this week Inventory Last week Inventory Last month Inventory Last year Same year-on-year inventory year-on-year 603.04

619.82

-16.78

662.07

-59.03

549.86

53.18

This week, the national rebar inventory decreased slightly compared with last week. First, the current state of maintenance and repair of steel mills continues, some of the steel mills have reduced their supply of resources, and second, merchants everywhere have weakened their mindsets and intensified efforts to destock, leading to localization. Inventory decreased last week. This Wednesday's tender price for Yangang's general carbon billet was announced at only RMB 3015/ton, down RMB 125/ton from the previous period, and it will soon fall below the RMB 3,000/ton mark. The bidding again caused a certain impact on the market, and the space below the rebar price was once again opened. Merchants desire to ship or will be further increased. It is expected that in the short term, the national rebar inventory will continue to decline. At present, the country's major cities rebar inventory is 6.0304 million tons, compared with last week (2012-8-17), this week the country's national rebar inventory decreased by 167,800 tons, a decrease of 2.71%, the reduction compared with last week; Compared with the same period of last year (2011-9-2), the increase was 531,800 tons, a year-on-year increase of 9.67%, which was a decrease from the previous week.

3. Raw materials: Confidence in the market continued to fall as a result of the continued decline in the external disk. The decline in the import ore market this week was noticeably accelerating. The purchasing enthusiasm of the steel mills was low and the market volume was light. It is learned that with the price falling step by step, the current mine The amount of tenders has decreased, but the tender price has further declined. Some merchants have low-price cargoes and the market is still pessimistic. Among them, 63% of Tianjin Port's printing price is 790 yuan/ton, which is down 80 yuan/ton from the same period last week; This week, the price of domestic ore decreased significantly. With the continued decline in the price of foreign minerals, some steel mills use foreign minerals instead of domestic mines. At the same time, some steel mills continue to suppress iron powder procurement. At present, the market is still pessimistic and bearish on the outlook. The atmosphere is relatively strong. Tangshan 66% Fe fine powder wet basis is exempt from the tax offer of RMB 770/ton, which is RMB 60/ton lower than last week; Tangshan billet price fell sharply this week, and billet shipments have been caused due to falling finished product prices. Obstruction is obvious, the current business confidence in the market outlook is generally insufficient, but on 22nd Yansteel billet tender price 3015 yuan / ton factory, compared with the previous period fell 125 yuan / ton, than when The market price was 35 yuan/ton, which affected the pessimistic mentality of the business. However, due to the better finished product shipments, Tangshan billet slightly increased by RMB 10/ton over the weekend, but the current downstream demand has still not improved significantly and the market transaction remains unchanged. Less, the business is still mostly bearish on the market outlook, is now 15030 yuan / ton of Tangshan Rongxin Pu carbon, down 110 yuan / ton over the same period last week; this week, the overall stability of the metallurgical coke price, now Shanghai 2400 yuan secondary metallurgical coke / Ton, Shanxi Hejin Class 1 metallurgical coke 1390 yuan / ton, Pingdingshan secondary metallurgical coke 1390 yuan / ton, compared with the same period last week fell 300 yuan / ton; this week, ocean freight quotes chaos, before falling or rising, including Brazil to The seaborne fares of China route were reported at US$17.195/t, down by US$0.084/t; West Australia to China route was US$6.750/t, up by US$0.15/t.

4. For steel mills: This week Angang, Shagang, Hebei Iron and Steel Group, Benxi Steel and other steel producers introduced a new pricing policy on the basis of the previous price policy, which are as follows: Angang September HRC reduced 250 yuan/ton Medium plate down 100 yuan / ton; cold rolled down 150 yuan / ton; Sha Steel rebar prices in late August unchanged, high line down 10 yuan / ton, disk screw down 30 yuan / ton; Hegang in late August price of building materials Maintained unchanged, in September the mainstream specifications of the plate down 250 ~ 300 yuan / ton; Benxi steel products in September reduced 150 ~ 250 yuan / ton. For further information, please pay attention to the "Steel Plant Price Adjustment" section of the China Steel Net Steel Works channel; on the 24th, Anshan Iron & Steel Co., Ltd. released the second round of 2012 short-term ***** issuance announcement, and the company plans to issue a short-term vouching of 3 billion yuan; On the evening of the 23rd, the semi-annual report released by Maanshan Iron & Steel Co., Ltd. showed that the company’s net profit attributable to the shareholders of the listed company for the first half of the year was a loss of 1.893 billion yuan, a year-on-year decrease of 710.44%; on the 22nd, Chongqing Iron and Steel announced that the company received the controlling shareholder Chongqing Iron & Steel yesterday. (Group) Co., Ltd. informed that the National Development and Reform Commission issued the “Approval for the Approval of Environmental Protection Relocation Project for Energy Saving and Emission Reduction of Chongqing Iron and Steel (Group) Co., Ltd.” on August 16th. This document agrees to implement the energy saving reduction of Chongqing Iron and Steel Group. Replacing Environmental Protection Relocation Projects; On the 21st, Wuhan Iron & Steel (Group) Company issued the announcement of the third medium-term notes issuance in 2012. The company plans to issue 6 billion yuan of medium-term notes. According to the announcement, Wuhan Iron and Steel (Group) Co., Ltd. issued a medium-term note of RMB 6 billion for the period of 3 years, which will be issued on August 24; a few days ago, Baosteel Group Co., Ltd. and Dongfeng Motor Company had a new round of strategic cooperation. The signing ceremony of the agreement and the unveiling ceremony of the joint laboratory for automobile steel were held at the headquarters of Dongfeng Motor Company. A few days ago, the signing ceremony for the joint construction of the Bank of Jiangsu·Zhongtian Iron and Steel Group was held in the Group. At the ceremony, Zhongtian Iron and Steel Group and Jiangsu Bank jointly signed the "Strategic Cooperation Agreement between Bank and Enterprise". Zhongtian Iron and Steel Group Co., Ltd., Jiangsu Tianyu Energy Chemical Group Co., Ltd., Jiangsu Changbao Steel Tube Co., Ltd., and Jiangsu Tiancheng Steel Tube Co., Ltd. The four companies and Bank of Jiangsu Co., Ltd. signed a "cooperation agreement to establish a bank-enterprise cooperation."

5. Downstream demand: Recently, the National Bureau of Statistics announced the changes in the sales prices of residential houses in 70 large and medium-sized cities in July. The number of cities in 70 large and medium-sized cities with newly-increased prices of commercial housing increased by 50. The figure for June was only There are 25. Since the macro-control of the property market, the general increase in housing prices in the country has been basically curbed, especially in first-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen, and some regions have seen a significant decline in housing prices. However, in the process of regulation and control of the real estate market, there are also many signs of problems, which may allow housing prices to rebound. According to industry insiders, the current customer's willingness to purchase a house is slightly lower than that of June and July, and the sentiment of the market has increased. In August, as the real estate control policy entered the window period, the pace of home buyers' entry into the market slowed, and it is expected that the overall market volume will decline slightly. However, judging from the market development trend in July-August, there is still a very high possibility that the trading volume of Jin Jiuyin and the Tenth Floor City will rise at the same pace. The recent introduction of policies and policies will affect the growth rate of the gold, ninety and ninety-tenth markets; the National Bureau of Statistics announced on the 23rd China’s economic and social development achievements report that since the party’s 16th National Congress, China’s fixed asset investment has maintained rapid growth. The stable and rapid economic development has made a positive contribution; the investment structure of fixed assets has been further optimized, mainly in the enhancement of regional investment coordination, the private investment in fixed assets is full of vitality, and the state-owned economic investment has grown steadily; on the 3rd, it was learned from the Ministry of Water Resources that in recent days, At the national seminar on water conservancy investment, Zhou Xuewen, chief planner of the Ministry of Water Resources, proposed that the task of water conservancy construction in China in the next 10 years be very onerous, there are many construction projects, and the scale of investment is large. In the future, efforts will be made to increase the strength of water conservancy investment companies and support them. It was bigger and stronger; July excavator sales of 5886 units, ring -28.97%, -23.21% year-on-year, cumulative -37.54% year-on-year; loader sales 11,713 units, ring -21.88%, year-on-year -27.55%, cumulative year-on-year -25.80%; bulldozer sales of 649 units, ring -29.38%, -14.72% year-on-year, cumulative -36.24% year-on-year; Roller sales of 946 units, ring -24.14%, -26.38% year-on-year, cumulative -43.34% year-on-year; 1501 Taiwan crane sales, ring -28.32%, -19.86% year-on-year, cumulative -41.41% year-on-year. Compared with June, except for road rollers and cranes, the year-on-year decline in major products has increased.

China Steel Network view:

Affected by factors such as raw material prices, steel price adjustments, and HSBC PMI, the steel in this cycle accelerated and fell below the 3600 and 3550 levels. The new low of the period price was repeatedly refreshed. Currently, it is currently supported at the 3500 level and the decline has eased. The short market atmosphere is unusually strong. If there is no positive information to boost, it is expected that the next cycle of steel will have room to fall, focusing on the effective support of the 3500 line, and next week the prices of building materials will continue to decline.

Next week operation suggestions:

It is recommended that investors can consider a short-term reduction in their initial short-selling and a short-term rush in the day. Remember not to blindly buy the bottom.