The central bank cuts the RRR again to release liquidity, which is good for steel prices
Threaded market: Last week, domestic construction steel prices fluctuated strongly, and market transactions were average. At the beginning of the week, the snails rebounded during the opening period, and the market was actively trading. Speculative demand was also driven, and the volume picked up. The price continued to rise slightly in the middle of the week, but the volume of transactions was relatively average. At the end of the week, the snails fluctuated downward, and the market inquired attitude was cold. It is expected that today's building materials market prices will be dominated by consolidation.
Hot-rolled market: Last week, domestic hot-rolled coil prices fluctuated, and market transactions were generally average. At present, the business operation mode is still mainly based on shipments, and the merchants are not very optimistic about the later market. The output of steel mills continues to increase, and the decline in total inventory narrows. The overall situation is still high in supply and inventory, although demand has rebounded. The hot rolled market price is expected to fluctuate today.
Material prices: 20MNSI billet in Tangshan area reported 3480 yuan, up 20; Q235 billet reported 3380 yuan, up 20.
Last week, the future prices of black varieties showed a trend of “rising first and then falling”. The main 2001 contract price of rebar rose to 3474 and then fell. The Central Bank decided to lower the deposit reserve ratio of financial institutions by 0.5 percentage points on September 16, 2019 (excluding finance companies, financial leasing companies, and auto finance companies); in addition, it will apply additional measures to urban commercial banks that only operate in provincial administrative regions A targeted reduction of the deposit reserve ratio by 1 percentage point was implemented in two phases. The release of liquidity by the central bank boosted market confidence and benefited steel prices. In addition, in order to ensure the air quality during the National Day military parade, the recent environmental protection restrictions in Hebei have been relatively frequent, and the production of steel mills has been affected, resulting in a continuous decline in steel production. As of the week of September 5, the national weekly production of rebar was 3.384 million tons. A month-on-month decrease of 105,000 tons and a year-on-year increase of 174,000 tons, steel supply pressure was further eased. In terms of inventory, due to the recent continuous decline in steel production and the rebound in downstream demand, steel inventories have begun to decline. As of September 5, the national social stock of rebar was 5872,500 tons, a month-on-month decrease of 222,300 tons and a year-on-year increase of 154.81 10,000 tons; the national rebar steel mill inventory was 2.477 million tons, a decrease of 222,000 tons from the previous month and an increase of 670,400 tons year-on-year. The pressure on steel inventory weakened and supported the price of steel. The 2001 contract of thread rose and the target price was 3500; the contract of Hot Rolled 2001 rose and the target price was 3500.