Warning color code: blue
● Market review: futures once fell, spot shock low;
● Cost analysis: raw materials continue to be weak, the focus of cost down;
● Supply and demand analysis: both supply and demand contraction, inventory de-smooth;
● Macro analysis: active policies focus on helping the economy to return to the right track.
● Comprehensive point of view: this week, the domestic construction market continues to be weak: the spread of the epidemic, terminal demand is suppressed, black commodities fell sharply, the price of superimposed raw materials low, steel mills around the fall, spot prices follow the trend of decline; Near the weekend, the black futures stop falling stability, the potential of the spot slowdown - the whole week market showed a shock low, and our judgment last week ”confidence frustrated, shock repair” basically consistent. For next week’s market, in addition to the uncertainties caused by the epidemic, there are also several changes worth paying attention to: on the policy side, in the face of the new downward pressure on the economy, the management has set the tone of ”stabilizing growth, stabilizing market players and ensuring employment”. In the later period, the combination of policies will be introduced one after another, and the domestic economy is expected to gradually recover. On the demand side, the downward trend of the real estate industry will slow down as local property market policies continue to be loosened. In addition to the downstream steel enterprises to resume production, early suppressed demand or recovery. At the cost end, the price of coke, iron ore and other raw materials fell sharply, and the space for further decline is limited, and the cost support effect appears again. In the supply side, due to the profit space is compressed, inventory transfer blocked, steel mills actively stop, limit the increase in production, crude steel and construction steel daily output has fallen signs, supply pressure is expected to ease. In general, as long as the epidemic is under control, the expectation of demand recovery under the protection of policy will be enhanced, and the full resumption of work in Shanghai will be a landmark event. Therefore, we hold a neutral evaluation of the market next week - blue warning: slow demand recovery, low prices for rise. Specifically, the steel index will run in the 4990-5100 yuan range.
Post time: May-24-2022