Supply and demand pattern

With the passing of time, the characterization of the demand off-season is more and more prominent, the speed of building materials transaction and apparent consumption weakening gradually accelerated, the range of social inventory of rebar also accelerated correspondingly, the growth difference between supply and demand of Cold rolled Square Steel Tube gradually expanded, the short-term steel price pressure. After the festival steel market ushered in a “red start”, the spot market “rising sound”.

From the historical law, the social inventory of rebar usually peaks in early March, and this year’s stockpiling cycle should be a short one in the calendar years, and the current stockpiling speed and amplitude did not exceed expectations compared with the previous two years, so from the current situation, the overall pressure of stockpiling is controllable, which is also an important reason why the price of hot rolled steel pipe is still at a near three-month high recently.

In the market from December to January this year, although it is in the seasonal demand slack season, but the material prices are still oscillating stronger operation, the main reason is the market’s optimistic expectations for the future. Before the festival, the market generally believed that after the Spring Festival, the downstream will embrace a “sunny spring”, and with the gradual improvement of the credit environment, the speed of loan approval and the increase of money supply, the market demand is expected to achieve a “gold, three silver and four silver”, which is also in line with the trend of the real estate market bottoming out since the fourth quarter of last year. However, it should be noted that the situation on the demand side of pre galvanized steel pipe will not emerge until at least March, but whether the real estate market will get warmer as expected and whether the strength of the recovery will reach the expectations is still unknown, which will have a substantial impact on the finished material price, and even affect the trend of steel price in the middle or second half of the year.

According to the statistics of rebar prices after the Spring Festival holiday in past years, the probability of spot steel prices after the Spring Festival is about 54% higher than before the festival, the probability of holding steady is about 15.4%, and the probability of futures prices rising after the opening is about 66.67%. The market moves mainly depending on the macro or expected boost to futures prices and the contrast between actual demand of steel conduit that fails to deliver on expectations. For a period of time in the future, the probability of steel output is still low, and the running rhythm of steel price is mainly affected by the disturbance of warehouse amplitude, if there is no great leap of social inventory accumulation speed in the later period.