Since November,ArmorThe 2301 contract reversed the sharp decline after National Day and rebounded sharply from below 3,400 yuan/ton. In the past two weeks, it successfully recovered the short-term moving average and settled above the 3,700 mark yuan/ton. The main driver is the multiple benefits of the macro level, but there are still hidden concerns in its very supply and demand.
Judging from the global macroeconomic backdrop, the market sentiment has improved markedly over the past two weeks, providing the commodity market with a basis for a collective rebound. Since November, the domestic macro economy has also been positive, such as the issuance of local government special bonds in some provinces earlier than expected for next year, the further optimization of domestic epidemic prevention policies and the introduction of “Sixteen Points” of financial support policies for the real estate market.
Specifically, on November 1, the Ministry of Finance issued in advance the new limit of Fujian province’s 2023 public debt of 103.4 billion yuan, an increase of 33.9% over the previous year. According to data from the National Bureau of Statistics, my country’s infrastructure investments increased by 8.7% year on year from January to October. In fact, the growth rate of infrastructure investment has remained relatively stable this year, partially offsetting the drag on demand due to the continued decline in real estate investment growth. The issuance of about 93% of the order, from July to September , the issuance of new bonds domestically decreased markedly, mainly due to the pass-through of the previous issuance allowance to the infrastructure sector. As the Ministry of Finance started releasing next year’s quota a month earlier than in previous years, although it cannot be quickly converted into short-term practical volume, infrastructure investments will continue to be supported by the midline.
On November 12, the central bank and the China Banking and Insurance Regulatory Commission jointly released the “Notice on Doing a Good Job in the Current Financial Support for the Steady and Healthy Development of the Real Estate Market”, which covers development loans , Trust Loans, M&A Loans, Secured Building Delivery, Real Estate Bailouts, and Loans Various upstream and downstream real estate finance, such as grace period, construction loan, lease finance, personal mortgage, and credit surveys . The growth rate of domestic real estate development investment continued to decline this year. From January to October, the national real estate development investment was 11.3945 billion yuan, a year-on-year decline of 8 .8%, showing negative growth for the seventh consecutive month, and the decline continued to expand. The latest policy of financial support for the real estate market has rescued real estate companies from the source of funds, and especially calls for stable real estate development loans to “treat all types of state-owned and private real estate companies equally.” This policy is a symbolic signal and the real estate sector is expected to improve gradually.
In addition to the macro positive level mentioned above, the supply and demand pattern for rebar has changed slightly recently, mainly on the supply side, and the improvement in demand has not been significant. As of the week of November 11, the operating rate of blast furnaces in Tangshan was reported at 51.59%, a decrease of 6.14 percentage points from the week of October 7. At the same time, the operation rate of the national blast furnace dropped from 83.50% to 77.21%. The average daily production of molten iron fell from a high of 2.4022 million tons in the week of September 30 to 2.2681 million tons in the week of November 11; Average daily crude steel production fell to 1.9868 million tons, a new low since mid-August; The weekly rebar production also showed signs of peaking and declining at the end of October.
This week, limited production in the heating season is about to start one after another. Steel mills have low expectations for future demand and the supply of steel products will continue to decline. However, due to the current slow profit per ton of steel on the disk, the market is driving the spot increase, the basis of futures and spot has narrowed, the spot steel profit per ton has recovered to a certain extent and the decline in rebar production may be limited. On the demand side, as of the week to Nov. 11, apparent weekly rebar demand was reported at 3.2264 million mt, down slightly by 93,700 mt week over week, showing signs of turning. Against the backdrop of rushed construction projects such as infrastructure, apparent rebar demand may maintain a level of around 3.2 million tonnes in the near term, but the current level has been relatively low over the past five years. the influence of seasonal factors off-season, the demand for rebar It is difficult to be optimistic.
In summary, under the dominance of macro favorites, rebar followed the market and continued to rebound, correcting the current basis difference and profit per ton of steel. However, there are signs of contraction at both ends of rebar supply and demand, and inventory has dropped to a low level in nearly five years. Follow-up should look at the influx of infrastructure and other projects and the performance of traders’ winter storage early next year. (Shi Lei, New Era Futures)
Massive information, accurate interpretation, all in the Sina Finance APP
