May the strip market may not be able to pull up sharply in May

After the Spring Festival, in the situation where all parties are looking forward to rising, the band has come all the way. It is bitter and tearful. The so-called gold three silver and four, did not bring much good news to the market, the market all the way down. As of May 7, the 145-series strip fell 150 yuan/ton from the previous year, a decrease of 4.25%. The 232-355 belt fell 180 yuan/ton, a drop of 5%. The price difference between the two was also reduced from RMB to RMB 40/t. The difference between the 145-series steel strip and steel billet was RMB 190/ton, and that of the 232-series strip steel billet was RMB 230/ton. How will the market behave again in May, is the peak season delayed or is it basically hopeless in the first half?

The increase in production output is still not optimistic. In January-March 2013, the cumulative output of hot-rolled narrow strip steel was 14.644 million tons, an increase of 1.826 million tons from the same period of last year, an increase of 14.2% year-on-year. In January-March, the output of hot-rolled narrow strip steel in the Tianjin area totaled 11.18 million tons, an increase of 1.588 million tons from the previous year, and a year-on-year increase of 16.55%, accounting for 76.35% of the national output. From January to March, the cumulative number of hot-rolled narrow strips totaled 38,200 tons, and the export volume accounted for 0.26% of the output from January to March. This has little effect on the narrow-band market price trend. Under the poor market conditions, it cannot transfer risks through exports. .

The manufacturing sector is still in the expansion zone. Commodity plummets and drags down The steel manufacturing market in April China's manufacturing purchasing managers index (PMI) was 50.6%, which was higher than 50% for seven consecutive months and is still in a stable range. However, it was 0.3 percentage point lower than that in March. The weaker growth indicates that the economic growth momentum still needs to be strengthened. In the short-term, it is difficult for steel and other commodities to find a good support in macroeconomic terms. The house leakage was affected by continuous rain. In mid-to late April, gold fell sharply in one hundred years. Crude oil prices also fell sharply by about 10%. Prices of commodities such as iron ore and coal have been and will continue to be affected. The further decline in the price of raw materials has pushed down the cost of steel products. Only further declines can force the steel mills to cut production.

Resources supply pressure is still small According to the latest data released by the China Iron and Steel Association on April 26, the average daily output of crude steel of the members of the China Iron and Steel Association was 1.8891 million tons in the middle of April, which was a 0.48% decrease compared to the previous period. The average daily output of crude steel in the country was 2,115,800 tons, a decrease of 0.38% from the previous month. Although the output of crude steel has finally dropped, it is still at a high of more than 2.1 million tons. Now the normal level of strip production is high and the amount of supply is relatively large. Since the beginning of last year, the southern market has seen a significant reduction in the stripping capacity of the northern strip. Therefore, the normal high supply this year has a large pressure on the northern market. It is expected that the northern market will be very difficult for the whole year. Get rid of the big supply, supply and demand slightly out of balance. From the perspective of spreads, the price difference between Tangshan and Wuxi has been adjusted to 150-200 yuan/ton since the beginning of this year, while the normal range is 180~250 yuan/ton, and there is greater resistance from north to south.

The alternatives mentioned once again that the market crisis was difficult to cover the opening of the market in May. Although the market had a tentative pull-up, it could not be beaten by shipments. Most steel mills and traders were pessimistic and expected to add to the current fundamentals of the steel strip market. Under the influence of the financial environment, the steel strip market may enter a sharply lower trend in May, and with the increasing pressure of coil inventory, coupled with a significant drop in prices, part of the demand for coil strip replacement strips will once again be put on the agenda, so in May Although businesses are looking at the bottom, there are not many businesses that actually dare to operate. Most of the businesses are quick to reduce the risk of reducing their inventory. Some businesses are interested in looking at the bottom of the market, but for the current market, due to more uncertain factors, the actual business owners Less, it adds a layer of fog to the market.

Downstream industries have different performances in real estate: National Bureau of Statistics released the national real estate development and sales in January-March 2013. In March, the real estate development climate index was 97.56, which was 0.36 points lower than that in February. In February, the index was 97.92, which was 2.33 points higher than last December. From the statistical data, although the growth rate of investment and sales has declined to a certain extent compared with the previous two months, the fundamentals of the real estate industry are still in the process of rebound. In addition, although the five country rules have been basically introduced, the implementation of policies is limited. For now, the extent to which the fundamentals of real estate are affected is not significant, and it is expected that the real estate will continue to be in a rising channel in the later period.

Automobiles: According to data released by the China Automobile Association in March, the production and sales of automobiles reached 2,085,200 and 2,035.1 thousand vehicles respectively in March, and the growth rate was over 10% in the same period, and the growth rate exceeded 50%. Among them, a total of 1,585,500 passenger vehicles were sold, an increase of 42.60% from the previous period and a year-on-year increase of 13.25%. Passenger vehicles as a whole maintained a rapid growth trend and became the main driving force for the overall growth of automobiles. The automotive market will bring about substantial growth and will form a certain degree of positive effect on hot rolling.

Machinery: According to statistics from the China Construction Machinery Industry Association, domestic sales of excavators were approximately 33,000 units from January to March 2013, of which excavator sales in March were higher than the total sales in January and February. Although obvious signs of recovery of construction machinery, however, due to the high inventory in the early period and the weak recovery of the economy, it is expected that the growth of construction machinery will be limited and the recovery will continue slowly.

It is difficult for the macro economy to be too good, and the improvement of the downstream real estate, automobile industry, and construction machinery will not be able to withstand the suppression of high production capacity and high inventory. In addition, the steel mills continued to lower their price balance losses, further lowering resource costs.

The weak demand, unabated supply, and macro negative factors have caused difficulties in the three markets of Gold, Silver and Silver. At the beginning of May, the market has already begun to show pessimism. As a result, it is also difficult for Strip to go out of its own wave, and the three-month turmoil has been dropping. Unstimulated market transactions turned better, but it increased the pessimism of traders on the market outlook. For the current price, some traders believe that the operation risk is not large, but the mentality based on macroeconomic and other policy instability is difficult to improve. Most of them are cautious to wait and see and do not dare to blindly buy goods. Taken together, in May the strip market may not be able to significantly increase the situation, but still maintain the main shock downstream. If the adjustment of the billet manufacturers to reduce production overhaul, the market may decline in May.