After the concentrated outbreak of the overseas epidemic in March, the market worried that global steel demand would be greatly impacted, which caused a sharp drop in domestic and foreign steel prices. Among them, the price of hot-rolled coil fell the most. However, due to the orderly progress of domestic resumption of production and work, thread The price of steel fell relatively small. In April, the price difference between hot rolled coil and rebar in Hangzhou reached -200 yuan/ton, close to the lowest level in the same period in history. Therefore, at that time, the profit of the steel mills producing hot-rolled coils and rebars showed a larger "split". The steel output tilted toward rebars. At the end of May, the rebar output was close to 4 million tons per week, while the output of hot-rolled coils was only 3.08 million tons/week.
With the strong fiscal policy and monetary policy stimulus in Europe and the United States, the effective prevention and control of the superimposed epidemic and the smooth progress of vaccine research and development, starting in June, domestic and foreign sheet demand has far exceeded market expectations. Among them, the manufacturing industry has entered a high boom cycle, and construction machinery welcomes Come equipment update cycle. Driven by the strong demand for plates, the prices of hot-rolled coil, cold-rolled coil and medium and heavy plates have continued to rise from low levels. Under the stimulation of orders and profit transmission, domestic steel production has re-inclined to the plate category. According to the latest data from Mysteel, the production of rebar in the last few weeks was 3.6 million tons/week, down 400,000 tons/week from this year’s peak level. It has fallen back to the same period last year, while the production of hot coils has rebounded to 3.32 million tons/week. The output of cold rolled coil and medium and heavy plate was 840,000 tons/week and 1.39 million tons/week respectively, both of which were far higher than the historical level.
Due to the rapid progress in vaccine research and development, there is a high probability that the global economy will usher in a full recovery next year. Therefore, the strong domestic and foreign demand for sheet materials will continue. And since the beginning of this year, the import of pig iron and billets has been greatly eased, and China has been transformed from a staged net importer of crude steel to a net exporter of crude steel. Therefore, the strong domestic and foreign plate demand is combined with the gradual reduction of imported crude steel resources. The peak supply of rebar next year is likely to remain at a neutral level in the second half of this year. In terms of inventory, the current absolute inventory of rebar is still high year-on-year, but the inventory-sales ratio of rebar has dropped to the same period in history, so the current rebar inventory pressure has been greatly reduced.