The disaster caused by the sharp fall of the hotte

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Steel stocks plummeted, steel prices fell caused by the disaster

according to the latest market report of relevant institutions, the domestic spot steel price composite index closed at 144 points in the recent week (March 19 to March 23), down 3.63% in the week. Compared with the previous slight decline, the spot price of steel fell sharply this week, and the prices of all varieties fell significantly

while the steel price fell, the trend of steel stocks in the A-share market is also difficult to be optimistic. For a while, many market participants began to be pessimistic about the future trend of steel prices and steel stocks

steel prices and share prices fell together

according to analysts in the steel industry, from last week, steel varieties showed a trend of decline across the board. Among them, rebar, hot coil and billet became the leading varieties. As of March 26, the week on week decline of rebar has reached 5.1%, and the week on week decline of hot coil is 3.67%. "Among the spot goods, such a decline in the short term is already relatively large." Analysts said

while the steel price fell, it is difficult to be optimistic about the trend of steel stocks in the A-share market. In the last six trading days, the steel industry index fell by nearly 14%. The decline in individual stocks was even greater. The largest decline in 6 days of many steel stocks, such as Xingang (600782), Liugang (601003), Shaogang Songshan (000717), Xining Special Steel (600117), has exceeded 20% only in this way can we have high-quality products

the decline in steel prices and steel stocks did not just begin last week. In fact, before the Lantern Festival, there was a small rebound in domestic steel prices. However, after the Lantern Festival, that is, from the beginning of March, domestic steel prices have begun to show a continuous downward trend. The adjustment of steel stocks in the secondary market is earlier. Looking at the K-line chart of the iron and steel industry index, we can see that the iron and steel industry index has shown a downward trend since it reached a high of 7051.25 points on September 13, 2017. Although it has rebounded during this period, the overall focus is constantly moving downward, especially since March 19, the adjustment range has increased significantly

"the relationship between supply and demand will affect the trend of domestic steel prices. 4. A device that can accurately describe the stress-strain curve, while industry fundamentals still largely affect the stock price performance of steel stocks in the secondary market." A securities investment adviser told e company that if the steel price in 2018 is significantly lower than that in 2017, the trend of steel stocks throughout the year is not optimistic

Why did the steel price fall

in 2017, under the influence of multiple factors such as supply side reform, environmental protection and production restriction, domestic steel prices rose all the way, and steel enterprises also made a lot of money. In contrast, the trend of steel prices today is quite different from that of last year. Everbright Securities said in the weekly report of the steel industry that the domestic steel price index fell significantly by 3.63% to a new low since August 2017; The simulated profit of the steel industry has fallen back to the level of the first half of 2017; The "two sessions" have come to an end, but the average daily turnover of construction steel traders is only one time, down 10% from last week, indicating that demand has been delayed again against the background of the sharp decline in steel prices

"two reasons have caused the current round of domestic steel prices to fall." Analysts said that first of all, there was a lag in the digestion of high-end steel warehouses led by rebar and hot coil after the Spring Festival. In fact, since the Spring Festival, although some steel products are reducing inventory, the overall inventory of steel products has been increasing. For example, the inventory of deformed steel bars has increased by more than 40%, the inventory of hot coils has increased by 30%, and even continues to increase. It was widely expected that the market demand for steel would recover rapidly after the heating period in the North ended on March 15. However, the actual situation is that due to many factors, the digestion of high steel inventory lags behind

in addition, the Sino US trade dispute that just broke out has been very obvious in the futures market. Because now steel products have not only commodity attributes, but also very strong financial attributes. Because the futures market and the spot market have a strong linkage, the performance of the futures market will affect the spot market now

Shenwan Hongyuan believed in the latest "steel week view" that the social inventory of steel fell, but the decline was less than that of the same period last year, and the inventory of steel mills rose, and the overall inventory was still high. The combination of high inventory and rising trade war led to a large decline in both futures and cash. At present, some electric furnace plants have suffered large losses, the output is expected to decrease, and the demand will gradually recover after the two sessions. It is expected that the short-term steel price is still weak, but the decline will narrow

this year's fundamental lies in destocking

in 2017, the performance of steel stocks in the secondary market was commendable. Benefiting from the overall recovery of the steel industry, the operating performance of steel listed companies is also good news. For example, the 2017 annual report of Fangda special steel (600507) has revealed that the company achieved an operating revenue of 13.945 billion yuan during the reporting period, an increase of 56.27% compared with the same period last year, and a net profit of 2.540 billion yuan, an increase of 281.40% compared with the same period last year. According to the 2017 annual report of Shagang (002075), the company achieved an operating income of 12.414 billion yuan, an increase of 63.66% year-on-year; The net profit was 705 million yuan, an increase of 220.37% year-on-year

however, with the recent decline of steel prices and steel stocks, especially after the outbreak of trade disputes between China and the United States, market participants have been pessimistic about the annual trend of steel prices and steel stocks. However, in its latest research report, Tianfeng securities believed that steel prices fell significantly last week as a whole due to the Sino US trade war and the impact of middlemen's price reduction and shipment at the end of the month to recover funds. However, when the short-term complex mood is digested, the trend of supply and demand tightening caused by the resumption of work remains unchanged. On the one hand, while the price drops, the upstream raw material price is higher, ensuring the profitability of the enterprise

"based on the judgment of the overall macro-economy, the steel price in 2018 will be slightly lower than that in 2017, but there should be no continuous falling bear market expected by many people. There is no need to be too pessimistic about the trend of steel prices throughout the year." Analysts judged that DuPont, Bayer, BASF, Dow Chemical, Breyer, Shicheng and Xinle Huabao have launched their own solutions. After the previous capacity reduction, the overall environment of the steel industry has been much better. Many small enterprises, especially some enterprises that produce "ground bar steel", have withdrawn from the market, and the competitive advantage of large enterprises has been further enhanced. Although some of the downstream market size is decreasing, the overall supply and demand environment is still in a weak balance, and there has not been a large gap or surplus

the Sino US trade dispute can only be said to have a partial impact on China's steel industry, but the impact is not great, because the United States is not China's main steel exporter and will not affect China's overall steel export volume. "From what we have learned so far, the benefits of iron and steel enterprises are still relatively good, and the annual operating benefits are still worth waiting for." Analysts said that for the domestic steel industry, the fundamental thing in 2018 is to destock

Fangda special steel predicted in its 2017 annual report that China's steel industry is still in the period of transformation and upgrading in 2018, and the domestic steel supply and demand fundamentals will gradually transition from tight balance to loose. The situation of strong steel and weak raw materials in 2017 may be difficult to continue in 2018, and the profits of steel enterprises will appear high and narrow. On the whole, steel prices are expected to show a wide range of fluctuations in 2018

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