November supply and demand weakened construction steel market

 “Silver October "is the traditional steel market season, but for the threaded steel, wire and other construction steel market, it seems that the peak season is not prosperous, price shocks, market transactions in general, traders to the main shipping, digestion inventory, to avoid risk. For the November market trend, steel traders are mostly cautious mentality. Liang, general manager of Shanghai Hua Lei Enterprise Development Co., said in an interview with China Metallurgical News, the November market supply and demand will weaken, price or at high volatility.

Liang from the November construction steel market supply and demand two levels analysis, that November construction steel market supply will show "two minus two increase":

"One minus" is to enter October, environmental Protection Limited, steel production decline. November, the heating season limited production will start, some areas even early in October, and require "2+26" City of Steel enterprises to reduce the strength of $number, the impact on the output of steel, supply will also decline. In addition, steel mills major overhaul plans during the production period, expected in November, steel mills will continue to decline.

"Two minus" is "long strong plate weak" to "long weak plate strong", rebar and other construction steel production decline. At present, steel production plate enthusiasm is very high, and reduce the production of thread steel, will give later construction steel market supply has a certain impact.

"An increase" is the heating season before most of the steel mills full load production, increase production. At present, steel prices are still high, steel mills profitable, high production enthusiasm. At the same time, the iron and steel enterprises not affected by the restricted production of heating season are also increasing their manufacturing efforts.

"Second Increase" is the change of China's steel export situation, affecting domestic steel market supply. Since this year, China's steel export situation is more severe, the number of exports decreased. September, China exports 5.14 million tons of steel, a new low since February 2014. In addition to the relatively high steel prices in China, the international market trade friction is also an important factor, the later China's steel export difficulties will be increased, the domestic resources will also increase.

After entering the November, the construction, building materials industry will be affected by the heating season limited production and shutdown. In the future, the construction progress of outdoor open-air construction projects in northern areas or affected by weather factors will significantly reduce the new start project, which will also affect the demand for construction steel. Liang said, overall, in the heating season, construction steel market supply and demand both decreased. In December, supply and demand will shift from the original "tight balance" to "weak balance".

At the same time, Liang said, steel traders also need to pay attention to some of the following factors affecting the November construction steel Market trends:

First, pay attention to the implementation of the heating season. If the implementation of large, strict monitoring, the impact of supply will be greater than the impact of demand, thereby increasing the frequency and amplitude of steel price shocks.

Second, pay attention to the change of air quality. If the late northern and other areas of serious air pollution, fog haze weather, the local steel enterprises will take temporary production restrictions, cut-off measures, will have a direct impact on the construction of steel market supply and demand.

Third, we should pay attention to the change of supply and price. Because the steel enterprises around the heating season and demand intensity of the different, especially the "North South" of the start-up, construction steel market supply and demand situation is not the same, especially the supply and demand change degree and price volatility and trends need to attach great importance and concern.

Four is to pay attention to social inventory and steel mills inventory changes. According to the Steel Association statistics, as of the end of October, the key steel Enterprises steel inventory of 13.4242 million tons, the chain increased by 1.2131 million tons, an increase of 9.93%. Steel inventory from the drop to rise, late market supply increased, sales pressure increased.

Five is to pay attention to the influence of the change of iron and steel futures on the spot market. Recently, the futures market price changes frequently, and the steel spot market price fluctuation amplitude difference is obvious, to the steel market influence will increase.