The main contract of rebar is 3500-4000 yuan/ton oscillation
Investment and consumption growth continued to fall
Driven by increased imports, the growth rate of foreign trade continued to pick up, while the expansion rate of manufacturing industry also picked up further.But further declines in investment and consumer growth, as well as continued declines in industrial growth, suggest domestic economic pressures.
The latest statistics show that by the general administration of customs, May 1-2018, the China import and export trade totaled $1.81 trillion, up 16.8% year on year, growth is 4.48% higher than the same period last year, 0.4% higher than the first four months of this year, been back for a second consecutive month.In the first five months, China's export trade reached 957.059 billion us dollars, up 13.3% year on year, 0.3 percentage points lower than the previous four months, the third consecutive month of decline.Imports totaled us $857.386 billion, up 21 percent year on year and up 0.4 percentage points from the previous four months, the second consecutive month of recovery.
In order to fulfill the commitment of further opening up to the outside world, imports have been increasing, and the growth rate of foreign trade has kept rising, which has certain support for the economy.At the same time, the expansion rate of domestic manufacturing industry has also been further accelerated, which has strengthened the support for the domestic economy to a certain extent.China's manufacturing PMI for May 2018 was 51.9 percent, 0.7 percentage points higher than a year earlier and 0.5 percentage points higher than April, according to the latest data from the statistics bureau.
However, the continued decline in investment and consumption growth indicates that the domestic economy is under certain downward pressure and the economic situation is becoming more complex.
Bureau of statistics latest data show that 1, May 2018, China completed investment in fixed assets is 21.6 trillion yuan RMB, up 6.1% year on year, growth is 2.5% lower than last year, 0.9% lower than the first four months of this year, following a continuous down trend.1, May 2018, the total retail sales of social consumer goods grew 9.5%, growth is 0.8% lower than last year, 0.2% lower than the first four months of this year, also continue the trend of last fall.Among them, the total retail sales of consumer goods increased by 8.5% in May, 2.2 percentage points lower than the same period last year and 0.9 percentage points lower than April.
The return of industrial growth to a downward trend not only confirms the fact that the economy is under pressure, but also partly suggests that the later economic situation may be more complex.According to the statistics bureau, in May 2018, China's industrial added value increased 6.8 percent year-on-year, 0.2 percentage points lower than April's.Among them, the manufacturing industry added 6.6% in May, 0.8 percentage points lower than April and 0.3 percentage points lower than the same period last year.At present, the trade friction between China and the United States intensified, domestic financial deleveraging and ongoing real estate regulation, if the above factors superimposed resonance, may be to form a larger impact on the whole commodity market especially industrial products market.
Targeted reduction to hedge risk
Since the beginning of this year, government-led financial deleveraging has continued, money supply growth has continued to slow and social financing has been shrinking.Statistics show that the people's bank of China in May 2018, the narrow money supply (M1) rose 6% year-on-year, growth is 11% lower than last year, 1.2% lower than in April, following a sharp downward trend;The broad money supply (M2) grew by 8.3% year on year, 0.8 percentage points slower than the same period last year, unchanged from April, but the pace of growth has not escaped the general downward trend.The difference between M2 and M1 widened further to 2.3 percentage points.In the context of falling money supply growth, the scale of social financing is also shrinking, indicating that deleveraging is continuing.The latest statistics show that the people's bank of China May 1-2018, the total social financing scale up to 7.91 trillion yuan, from last year to reduce 1.47 trillion yuan, reduce further expand scale compared to the same period last year.
In the context of continuous financial deleveraging, market liquidity is affected to a certain extent, and short-term liquidity volatility increases.As of June 22, 2018, the overnight SHIBOR rate will reach a maximum of 2.9210% in the year to June 22, 2018, and a minimum of 2.4460%, according to Wind statistics.At the same time, the one-month SHIBOR loan interest rate after the early in the second quarter fell back quickly, centre of gravity is started up, as of June 22, one-month SHIBOR loan interest rates at 4.1510%, 3.7480% from the year's lowest have increased by 0.4030%, and continue the trend of continuous rise.
With more complex situation home and abroad, in order to maintain the domestic financial market stability, effectively hedge potential economic and financial risks, to alleviate the domestic entity enterprise liquidity squeeze, years of the people's bank of China has chosen the third drop.On June 24, 2018, the people's bank of China announced that since July 5, directional fell 0.5%, the directional drop of fund is mainly used for "debt-to-equity swap" and support small micro enterprise financing, liquidity is expected to release about 700 billion yuan.Due to pressure in the current Chinese economy, the domestic and foreign economic situation and financial market is also more complex, combined with the sino-us trade friction intensified, we believe that the years of the people's bank of China still has further reduced the possibility of quasi, which to a certain extent can boost commodity prices.
In addition, driven by the fed's interest rate increase and the reduction of the table, the trend of domestic capital outflow has increased slightly, the RMB has continued to depreciate, and foreign exchange reserves have also decreased.China's foreign exchange reserves stood at $3.11 trillion in May 2018, down $14.2 billion from April, according to the latest statistics from the people's bank of China.As of June 25, 2018, the dollar against the yuan central parity rate at 6.4893, compared with the year has increased 0.2129, 6.2764 in minimum is 3.39%, and presents the trend of rising, suggests that the yuan is going down.Although the people's bank of China's recent fall mainly for domestic structural problems, but as a result of the current as the fed's interest-rate increases, reduced quasi strategy or further depreciation, late will exacerbate market volatility.
Supply continues to increase
Driven by the supply-side reform, the benefits of steel enterprises have been improving continuously, and most steel mills have maintained high profits, which has also driven steel mills to increase production under the policy.The number of profitable steel mills reached 84.66% in the week ended June 22, 2018, according to Wind statistics.The blast furnace opening rate of China's steel mills reached 71.55 percent, 0.14 percentage points higher than the previous week, and remained near the highest level of the year.
The high start of steel mills has driven continued growth in crude steel and steel production.The national bureau of statistics latest statistics show that 1, May 2018, China's crude steel production 370 million tons, up 5.4% year on year, growth is 1% higher than the same period last year, 0.4% higher than the previous four months, maintained a rapid growth rate;From January to may, 2018, China's steel production totaled 435 million tons, an increase of 6.20% over the same period last year. The growth rate was 5.4 percentage points higher than that of the same period last year, 1.2 percentage points higher than the previous four months, maintaining a trend of continuous acceleration.As the current steel mills still maintain a high profit, the later steel mills are bound to continue the maximum production under the policy to ensure the maximum profit.We have learned that in the early stage, the gross profit of steel mills has exceeded 1000 yuan/ton, and the average net profit has exceeded 600 yuan/ton, which is actually higher than the average net profit of last year.Driven by such high profits, we believe that unless the policy restrictions are strict, the later steel supply will be abundant.
There are worries behind strong demand
Demand for steel has remained relatively strong so far this year, with new housing starts and construction growth picking up further boosting confidence.National bureau of statistics, the latest statistics show that 1, May 2018, China's housing construction area and the new construction area up to 6.85 billion square meters and 722 million square meters, the year-on-year growth of 2% and 10.8%, growth in the previous four months 0.4 and 3.5%.In building the new growth to return to rise at the same time, the growth of construction is back for a second consecutive month, to some extent, indicates that the real estate market in the context of continuous regulation, still maintained a certain toughness, demand for steel market is expected to also play a good supporting effect.
However, real estate development investment growth continued to fall, means that even if the market's expectations of the real estate is good, but in the context of continuous regulation, late property of the steel market demand pull may be concern.National bureau of statistics, the latest statistics show that 1, May 2018, China's real estate development and the total investment of 4.14 trillion yuan, up 10.2% from a year earlier, the growth rate of the previous four months was 0.1% lower, fell for a second consecutive month.While the growth rate of real estate development investment continues to slow down, the government's rectification of PPP projects has also led to a sustained reduction in project inventory, which means that infrastructure demand may weaken in the later stage.According to Wind, the total number of PPP projects entering the warehouse was reported to be 12,600 as of May 2018, a decrease of 0.06 million from April, the fourth consecutive month of decline.
In addition, the end of steel inventory reduction trend and the overall situation of higher than last year suggest that the steel market may turn to oversupply pattern in the later period.In the week ended June 22, 2018, China's main cities had a total steel inventory of 10.971 million tons, up 112,200 tons from the previous week, an increase of 48,170 tons over the same period last year, according to Wind statistics.Among them, the stock of rebar was 4.7822 million tons, up 50 thousand tons from the previous week, up 882 thousand tons from the same period last year.Stocks of steel and rebar in major cities have ended the trend of continuous decrease. If the stock keeps accumulating in the later period and the overall stock level is higher than last year, the steel market will continue to be under pressure.
The center of gravity of raw material cost is basically stable
Since this year, while the black chain each link price fluctuations increased, but for steel plant, raw material cost centre of gravity is basically stable, the price of the finished goods rebar focus is the raw material costs have obvious rise.According to Wind statistics, from 2017 to 2018, the average price of quasi-first-grade metallurgical coke (A<12.5%,<0.7%S,CSR>60%, mt8%) in tianjin port is 1984.64 yuan/ton and 2076.74 yuan/ton.Since 2017 and 2018, the average price of PB powder (61.5%) in Qingdao port is 542.32 yuan/ton and 489.62 yuan/ton.Under the condition of without considering other cost, coke and iron ore to steel mills in 2018 actually brings about 38 yuan/ton cost center of gravity down, but the price of finished goods rebar of gravity move about 116 yuan/ton.So that by the end of the current, steel mills average profit should be better than last year, this aspect will help steel mills tolerate late raw material may rise in price, on the other hand also drives the steel mills to maintain the policy allows the maximum production, to ensure that the late steel supply abundant.
All in all, under the complex long-short factors, the late steel market is expected to remain large range wide oscillation pattern of main rebar futures contract will continue to maintain in 3500-4000 yuan/ton range operation.
(author's company: China citic construction investment futures )
|
