In September, the national steel industry PMI fell slightly, with a final value of 51.3%. Coke is cautiously optimistic with high demand and high cost support in October. In October, the domestic strip steel market price may rise first and then fall.

. "Gold" is not "gold", "silver" is ten difficult to "silver". Whether the steel price can rise depends on these points

. The real estate market has welcomed three major positive factors in a row. Central Bank took action to release stable exchange rate signal

. 7 steel mills lowered the purchase price of scrap steel 20-50 yuan

My Steel Network News: On October 2, as of press time, a total of 7 steel mills lowered the purchase price of scrap steel.

▎North China Region‍

/2 [Anfeng, Qinhuangdao, Hebei] Scrap steel procurement downgraded 30, after adjustment: round steel head, four-thick bean 3080, mold steel 060, large channel steel 960, tower crane beam 2860, horse tellurium iron 2960, rustless small stator rotor 2780 yuan, rust-free large stator 2930, cold plate small material 2900, triangular silicon steel sheet 2900 iron bean 3020, steel bar head quality 3080, tax excluding.

October 2 [Hebei Qinhuangdao Baigong] is downgraded by 30. After adjustment: ordinary scrap steel A3020, ordinary scrap steel B2960, special crushing material 2910, first-level punching parts 2900, first-level bean 3110, second-level bean 3060, first-level cut-out grade 2990, steel head 3110, iron pin 2650, tax excluding.

October 2 [Hongxing, Qinhuangdao, Hebei] is downgraded by 50, after adjustment: fine steel 3030, high-quality steel 3010, heavy waste A2940, heavy waste B2870, silicon steel sheet 2850, cold plate crusher B2850, cold plate crusher A2870, silicon steel sheet crusher 2850 (ball-shaped), silicon steel sheet crusher 2690 (flake), fine steel head 3030 Mainstream steel head 3010 Shredded steel head 2970, large steel shavings 2620-2640, small steel shavings 2540-2560, general sales first-class 2470-2490, general sales second-class 2370-2420, excluding tax.

October 2[Yangang, Hebei]Scrap steel drops by 20-50. The specific price list shall prevail.

October 2[Inner Mongolia Baoxin Special Steel]Scrap steel purchase price down 20, after adjustment, the execution price: fine furnace material 2910, 14 pure steel bar cut 2890, special first grade 2910, special second grade 2860, Class A heavy waste 2790, Class B heavy waste 2740, 10 thick new steel plate lower material 2910, 6 thick steel plate lower material 2860, 14 upper steel head specification 50 inside 2890, 6-12 steel bar wire head 2790, tower crane mixed assembly 2760, excluding tax.

▎East China Region‍

October 2[Xingda, Jiangsu Xuzhou]Scrap steel purchase price lowered 30. After adjustment: fine furnace material 2690-2750, cold plate tiles 2830, general shavings 2570, steel shavings 2710, punching materials 2980-3040, tax excluding.

October 2[Shandong Luli]Scrap steel purchase price down 30, new material 1-3080, new material 2-2980, vehicle rear axle 3080, heavy waste 3060, medium waste 22980, general material 2860, body 2770, special crushing material 2860, cold steel 2460, new material briquetting (including 08 aluminum briquetting) 2700, side wire briquetting 2660, general material briquetting 1910, excluding tax, unit: yuan/ton. (My Steel Network)

. In September, the national steel industry PMI fell slightly, with a final value of 51.3%

My Steel Network News: In September 2022, the national steel industry PMI was 51.3%, a slight decline of 5.5 percentage points month-on-month, continuing to rank above the boom and drought line. According to the indicators, although all sub-indexes have shown high-level declines this month, the new orders, outputs, finished material inventory, and raw material purchase price indexes are still above the boom-bust line, indicating that the domestic steel industry continued to rebound in September, but the overall growth rate slowed down.Specifically, the domestic steel market showed a low first and high trend in September. First, the market was not sure about the uncertainty of the Federal Reserve's interest rate hike in and the lack of expectations in the demand performance, resulting in a strong wait-and-see sentiment in the market, and the spot price adjusted weakly. In the second half of the month, as the interest rate hike in was landed, the market focused on returning to the fundamentals of the industry. The strong demand for stocking before the National Day boosted market confidence, and prices began to fluctuate and rise at low levels. Faced with the upcoming October, whether demand can continue to be strong and how the price will behave, the author analyzes and interprets the various indexes of PMI.

Figure 1, Mysteel China Steel Industry PMI Index

Figure 2, Mysteel China Steel Industry PMI Sub-Indicators

, domestic major steel varieties price adjustment

, domestic rebar The average price was adjusted narrowly.

Figure 3. National rebar price trend

As of September 28, Myspic's domestic steel price comprehensive index was 150.78, a month-on-month decrease of 1.83%, a month-on-month decrease of 28.72% compared with the same period last year; the domestic long material index was 172.06, a month-on-month decrease of 2.20%, a month-on-month decrease of 27.93% compared with the same period last year; the rebar index was 164.49, a month-on-month decrease of 2.03%, a month-on-month decrease of 28.79% compared with the same period last year.

nationwide construction steel prices adjusted narrowly. As of the 28th, the average market price of 20mmHRB400E rebar in major cities across the country was 4,158 yuan/ton, a month-on-month decrease of 51 yuan/ton, and a decrease of 1,701 yuan/ton from the same period last year.

, domestic hot rolling average price adjustment

Figure 4, national hot rolling coil price trend

As of September 28, the domestic flat material index was 130.42, a month-on-month decrease of 1.37% from the previous month and a month-on-month decrease of 29.70% from the same period last year; among which hot rolling index was 143.38, a month-on-month decrease of 1.23% from the previous month and a month-on-month decrease of 30.27% from the same period last year.

As of September 28, the average price of 4.75mm hot-rolled plate coils in 24 major cities in China was 4,053 yuan/ton, a month-on-month decrease of 11 yuan/ton, and a decrease of 1,769 yuan/ton from the same period last year.

. Steel mill profits have shrunk significantly. The overall output growth rate slowed down

In September, the national steel industry steel mill output index fell by 7.5 percentage points from August, with a final value of 56.0. Specifically, since August, steel mills in various places have resumed production one after another, and steel mill output has recovered rapidly, but terminal demand has insufficient follow-up, and the price rebound has weak again. Steel mills are not very enthusiastic about continuing to increase production after profits shrink, and the overall growth rate of output has slowed down.

From the perspective of relevant indexes, the ex-factory price index of finished materials fell sharply by 26.9 percentage points to 48.4 this month, falling below the boom and bush line. The finished material inventory index fell by 15.9 percentage points to 50.8. Although the raw material purchase price index fell by 12.3 percentage points to 61.9, it is still above the boom and bush line. The domestic raw material purchase volume index fell by 13.8 percentage points to 46.9, and the foreign raw material purchase volume index fell by 9.4 percentage points to 49.7. It can be seen that steel mills have contracted profits and raw material purchase slowed down. According to the relevant data of

, on September 29, Mysteel surveyed the blast furnace operating rate of 247 steel mills in 247 steel mills, an increase of 1.96% from the end of August, and the blast furnace ironmaking capacity utilization rate was 89.14%, an increase of 2.31% from the end of August. The average daily iron and water production was 2.4022 million tons, an increase of 66,200 tons from the end of August; the weekly output of the five major domestic production enterprises was 9.604 million tons, an increase of 24,000 tons from the end of August. The inventory of the five major types of steel mills was 4.632 million tons, a decrease of 415,000 tons from the end of August. The market inventory of the five major varieties was 15.04 million tons, a decrease of 1.094 million tons from the end of August. For October, considering the strong performance of the current raw material prices and the profitability of steel mills is average, especially short-process companies are facing losses, and production continues to rebound not much. is expected to maintain the current level in October.

Figure 5. Steel production enterprise output index

Figure 6. Steel plant finished material inventory index

. Raw material prices performed strongly. Steel plant production profits shrink.

September raw material purchase price index 61.9, a slight decline of 12.3 percentage points month-on-month, but it is still above the boom and bush line. As of September 28, Mysteel data showed that the Myipic comprehensive index was 115.54, down 0.10% month-on-month and 9.52% year-on-year. Among them, imported ores fell by 10.82% year-on-year, and domestic ores fell by 7.36% year-on-year.

raw material inventory index in September was 43.5, down 15.5 percentage points month-on-month, falling below the boom and bust line. As of September 28, Mysteel counted that iron ore inventory in 45 ports nationwide was 131.842 million tons, a decrease of 5.3472 million tons month-on-month, and an average daily port discharge volume of 3.1514 million tons, an increase of 353,600 tons month-on-month. Mysteel counts the national steel mills imported iron ore inventory at 99.1104 million tons, an increase of 1.2716 million tons month-on-month. Mysteel counted 782,400 tons of coke inventory in 230 independent coking plants in China, a decrease of 2.52% month-on-month, and Mysteel counted 6.4803 million tons of coke inventory in 247 steel mills in China, a increase of 4.21% month-on-month.

As the weather turns cooler, downstream construction conditions improve, terminal demand improves day by day, and steel mills are also more enthusiastic about replenishing warehouses, but the output has rebounded, and some areas are affected by Typhoon or the epidemic, so the demand recovery is insufficient, spot prices have fallen, but the raw material prices have performed firmly. In late September, boosted by demand for stocking during the National Day holiday, prices at both the raw material and the finished material end rebounded, but the growth of the finished material end was slower than the raw material end. Under this circumstance, most steel mills are still in a state of low profits and are not willing to expand production. Therefore, is expected to fluctuate and adjust to the main price of raw fuel.

Figure 7. Raw material procurement price index

. Demand in the peak season has shown some results. Corporate orders have increased steadily

In September, the national steel industry new order index was 54.2. Although it fell slightly by 6.5 percentage points, it is still above the boom and bust line, indicating that downstream demand is more resilient, especially as the National Day holiday is approaching, downstream stocking demand is released in a concentrated manner, and the overall market transactions have rebounded significantly.

looks forward to the later downstream consumption. October is the period for the centralized issuance of special bond balance limits. Infrastructure has the potential to continuously improve or even accelerate. In terms of housing construction, policies are implemented in various places based on cities, and the policy of "guaranteeing and stabilizing people's livelihood" is being implemented at an accelerated pace. The existing demand is expected to rebound steadily. In addition, some projects are rushing to build a construction period, terminal demand can still be expected. However, the difficulty in repaying payments and slow payments still exist in some projects, which may become a major factor restricting the price height.

In terms of manufacturing, the steel structure industry is expected to continue to improve with the support of favorable policies; the project process of the machinery industry will be further accelerated, and demand has risen steadily; while the home appliance industry is mostly based on stock demand, and demand is difficult to perform well; the automobile industry is affected by the macro environment and peripheral markets, and demand may have a pullback. Overall, there is still room for upward development in the downstream demand of .

Figure 8. New order index

. Internal and external prices fluctuated and fell, steel exports remained low

. New export order index of the national steel industry in September was 44.8, which continued to fall by 4.5 percentage points from August. General Administration of Customs data shows that China exported 6.153 million tons of steel in August 2022, a decrease of 518,000 tons from the previous month, a year-on-year increase of 21.8%; from January to August, a cumulative export of 46.225 million tons of steel, a year-on-year decrease of 3.9%. In August, China imported 893,000 tons of steel, an increase of 10.4 tons from the previous month, a year-on-year decrease of 15.8%; from January to August, a cumulative import of 7.453 million tons of steel, a year-on-year decrease of 21.2%.

China's export FOB prices for various types of steel exports fell slightly in September. At present, the domestic rebar export FOB prices are around US$593/ton, down 20/ton from the previous month, and the hot-rolled coil export FOB prices are around US$561/ton, down 27/ton from the previous month.Specifically, the overall market was in a volatile downward trend in September. With the large fluctuations in my country's domestic trade market at the beginning of the month, export prices also fell. Although there was a slight increase at the end of the month, export prices changed slightly. Since the current shipping period is basically December, overseas markets have begun to restock Christmas, export inquiries have increased. At present, domestic and foreign markets have basically maintained range fluctuations, and the inverted price difference between domestic and foreign prices has eased, but it is still necessary to monitor whether the price difference will return. Overall, the future market expectations of my country's domestic trade market are not strong in the short term, and the pressure of rising export prices is relatively high. Steel export volume may continue to remain low in September, and it is expected that it will continue to shrink in October, and prices will remain range fluctuations.

Figure 9, New export order index

June and October market analysis outlook

Looking at September, the domestic steel market showed a low first and high trend later. First, the market was under the uncertainty of the Fed's interest rate hike and the performance of demand was not as expected, resulting in a strong wait-and-see sentiment, and spot prices adjusted weakly. With the launch of interest rate hikes in the second half of the month, the market focused on returning to industrial fundamentals. The strong demand for stocking before the National Day boosted market confidence, and prices began to fluctuate and rise at low levels.

looks forward to October. The author believes that the domestic steel market may continue to run stronger after the holiday, but it is not ruled out that will rise and fall back to in the middle and late months. First of all, supply continues to operate at a high level. Although steel mills have recently been affected by the rise in raw materials, and there is little room for production to continue to rise, since the steel mills resume production in August, the overall output has rebounded by nearly 1 million tons at a low level, reaching a high level this year. Secondly, the sustainability of demand in the peak season needs to be verified. Although the demand for stocking during the National Day has performed strongly, and the daily trading volume of 237 traders nationwide hit a new high this year before the festival, the market has strong expectations for the later downward cycle of real estate and external economic recession. The demand for stock replenishment after the festival has ended, and there is limited room for demand to continue to grow at a high level. At present, the market is further looking forward to policies to ensure the future of the housing submission and stabilize the economy. Domestic steel prices in October still have momentum to rise overall, but the external environment is severe and complex. , Federal Reserve may continue to raise interest rates aggressively, and it is still facing great pressure in the medium and long term.

Overall, is expected to fluctuate and run stronger in October, so beware of the risk of falling. (My Steel Network)

, October high demand and high cost support, coke is cautiously optimistic

My Steel Network News: Coke market has once again faced challenges. The market has improved due to the rise in demand and the traditional consumption peak season, but the market has been hindered by the reality of low profits of steel mills. At the same time, coking coal prices rebounded first after mid-month, bringing the problem of a sharp increase in costs, causing coke companies to fall into a situation of full loss again. Looking forward to the coke market in October, high demand from steel mills is expected to continue , but whether lagging demand for finished materials can continue to release and raise steel prices in October and continue to repair steel mill profits has become a key point in coke price support.

. Price situation

Entering September, the price of coke only once adjusted, and there was a round of price drop on the 2nd, with a drop of 100 yuan/ton wet quit and 110 yuan/ton dry quit, and then the price remained stable until the end of the month. On the 30th, the domestic spot price index of MyCpic metallurgical coke was 2666 yuan/ton, with an average price of 2673.8 yuan/ton in September; Shanxi quasi-first coke 2460 yuan/ton, first-level coke 2550 yuan/ton, and the factory acceptance tax-inclusive price; the port quasi-first-level outbound price is 2720 yuan/ton, and the first-level outbound price is 2200 yuan/ton; the port quasi-first-level closing price is 2710 yuan/ton, and the first-level closing price is 2810 yuan/ton. The decline in coke prices at the beginning of the month was still due to the negative feedback of in the finished ingredient market. Steel mills have low profits and need to transfer cost pressure and actively reduce inventory and purchases. Although coke has not adjusted its price since then, coke companies have tried to increase their price increases many times in response to high downstream demand due to profit pressure on their own production at the end of the month, but mainstream steel mills have not accepted this round of price increases for a long time.Whether it is the price cut at the beginning of the month or the refusal to accept the price increase of coke in the middle of the month, it is a choice made by steel mills without profits.

In addition, coke export prices have been lowered recently. In the early stage, due to the overseas situation, the rise in energy prices brought about high coke prices. In the later stage, as overseas demand declined, the global commodity price reduction caused by the Federal Reserve's interest rate hike, has jointly caused the export price to decline.

. In terms of supply,

overall coke production in September was at a relatively high level. Before the coke companies fell into losses, coke production was in an upward state. At the end of the month, coke companies were actively reducing production under the pressure of losses. The current production reduction is not large. On the 29th, Mysteel surveyed the national total daily output of coking steel was 1.1404 million tons, a weekly decrease of 1.23% month-on-month, a month-on-month increase of 0.75% month-on-month, and a year-on-year increase of 4.48%; the utilization rate of the single coking capacity was 73.9%, a weekly decrease of 1.20%, and the utilization rate of steel coking capacity was 85.68%, a weekly decrease of 0.68%.

The reason for the current coking companies to reduce production is the only pressure of loss, and there is no interference from external factors. On the 29th, Mysteel Coal and Coke Division investigated the profitability of 30 independent coking plants nationwide, with an average profit of 112 yuan/ton nationwide; the average profit of 139 yuan/ton of Shanxi quasi-first-grade coke, an average profit of 139 yuan/ton of Shandong quasi-first-grade coke -46 yuan/ton of Inner Mongolia quasi-first-grade coke -109 yuan/ton, and the average profit of 106 yuan/ton of Hebei quasi-first-grade coke. After mid-September, the price of coking coal rose sharply, and the price of coking coal in mainstream areas generally rose by 200-300 yuan/ton, and the cost of coking has significantly increased, and coking companies have fallen into a loss-making state. As for the current data, supply will continue to shrink in the short term. Even after the first round of coke prices rise and fall, the trend of coke supply will not be immediately changed. The current reality of coke is that the increase in the rise has not been implemented for a long time, and the active production cuts of coke companies will continue to spread. At the same time, coking coal is still in the upward adjustment stage. Some coal types with lagging price adjustments are still in the process of price increase. The coking costs of coke companies still have room for upward growth, which means that the implementation of coke companies' first round of price increases cannot change the situation where coke companies are still losing money, so the active production cuts of coke companies will not change. However, it should also be noted that coke companies do not immediately reduce production as soon as they reach a loss. At the same time, they will also consider the problems of coke secondary returns and ordered orders. Generally, without affecting cash flow , coke companies will still insist on production. Therefore, 2 lies in the current market price increase atmosphere and the gradual completion of the coal price increase cycle, coke supply reduction behavior will be but not too large.

In addition, there is another important reason why coke increases this time is difficult to implement, that is, coke has a relatively low bargaining power in the coal-coke steel industry chain. In the past two years, as the new coking capacity has been eliminated, the production capacity has gradually become oversupply. As of September 27, 2022, Mysteel survey statistics showed that 8.4 million tons of coking capacity had been eliminated in 2022, with an additional 27.98 million tons and a net increase of 19.58 million tons; it is estimated that 39.69 million tons will be eliminated in 2022, with an additional 59.83 million tons and a net increase of 20.14 million tons. Although this part of the newly added capacity has not been completely converted into coke production, so much coking capacity still puts pressure on market sentiment. The slow increase in new production capacity is the result of coking companies' active choices under losses. Although there is no release of excess coke production, once coke profits appear, there are no external factors to restrict coke production. These new production capacity can quickly replenish the increase and have an impact on the supply and demand of coke.

. In terms of demand

2. Iron and water production continued to increase in September 2019, and demand was in an upward state. Coke demand has basically reached its peak this year. Demand has driven the increase in prices. On the 29th, Mysteel surveyed 247 steel mills with an average daily water production of 2.4022 million tons, an increase of 0.07% on the weekly basis, a month-on-month increase of 2.83% on the month-on-month, and a year-on-year increase of 13.88%.

High demand does support prices, which is the core of coke's decline and increase in September. However, before coke actively reduced supply, coke was in a dynamic balance state, supply and demand were increasing, and steel mills did not encounter obvious difficulties in purchasing, so the price was only stabilized and could not drive price increases.Including on the basis of the current slight reduction in supply, coke supply and demand are also at high levels, and there is no obvious imbalance.

For changes in iron and water production, like coking companies, steel mills will basically not take the initiative to reduce production without external factors. Moreover, due to the obvious reduction in production in the first half of this year, coupled with the pressure of economic downturn in the fourth quarter, there is a high probability that there will be no administrative means to forcefully interfere with steel mill production this year. Actively adjust enterprise production based on their own profits. According to the existing steel consumption data, steel mills can basically break even. Some steel mills already have profits, so the iron and water production after the National Day will inevitably be at a high level, and demand will not change for coke prices. The risk point of adjusting market supply and demand through profits is that when the growth rate of demand cannot match high supply, prices will fall rapidly, and the decline will be deeper and the losses will be greater. Such results will also be fed back to the raw material side, causing the market logic to be interpreted into negative feedback of the material again.

4. Inventory

html On the 229th, Mysteel surveyed coke inventory and found that the upstream of coke inventory was accumulated and the middle and downstream of the warehouse were destocked, and traders were still mainly shipped, and there was no large-scale procurement; independent coking inventory was 1.232 million tons, an increase of 50,000 tons; steel plant coke inventory was 6.453 million tons, an increase of 27,300 tons; port coke inventory was 3.031 million tons, an decrease of 107,000 tons; total coke inventory in each link was 10.716 million tons, an increase of 84,300 tons on the weekly basis.

From the inventory perspective, coke overall was in the stage of transfer of inventory to steel mills in September, but the coke inventory of steel mills was still at a low level compared with previous years. In terms of output, the iron and water production of 2.4 million tons, the steel mill inventory in previous years should be more than 8 million tons. Secondly, in terms of time nodes, the coke inventory of steel mills last year was about 7.5 million tons last year. However, this low inventory is not the difficulty of steel mills in purchasing coke, but the result of steel mills actively controlling inventory. Since the beginning of this year, steel mills have continued to be low profits. In addition, this year, including the fourth quarter, the finished ingredient market is not particularly optimistic, so steel mills adopt a low inventory strategy. This low-inventory strategy requires that supply and demand change in the same direction, and may not have a big impact in the short term. However, in the long run, when demand is high, supply will decrease. To ensure normal production of steel mills, the procurement of steel mills under low inventory will inevitably increase the difficulty.

. October coke market outlook

overall coke supply remained slightly tightened in October, and the high cost pressure of coking companies remained unchanged. Coking companies will operate in low profits or even losses in October and even the fourth quarter. In the short term, coke companies will continue to actively reduce production under losses, but coke has an upward trend and will make up for some losses. There is no expectation of a significant reduction in production for the time being. The reality of high demand in October will continue. Steel mills currently have no expectation of active production cuts, and iron and water production is high, and demand supports prices. The possibility of policy-based production cuts in October is limited, and the iron production in the later period is mainly affected by profit factors. Steel mills' low inventory strategy continues to maintain, and supply and demand change in reverse, and steel mills will release increments, but it is also difficult to release large-scale inventory replenishment.

price has not had much change in the price due to the relatively limited supply and demand changes in October, and the price change will not be too large. After the holiday, coke is stable and strong. It is difficult to see a significant decline in iron and water production before mid-October. Coupling with the high cost of coking coal, there is room for game for coking to continue to rise in the second round after the first round of rise and fall.

Verify the demand for finished materials after mid-month. If the demand maintains the current data, the price can remain stable and strong after mid-month. If the increase in demand for finished materials cannot reach the high supply of finished materials, the coke market will have a risk of a pullback. (My Steel Network)

. The domestic strip steel market price in October may rise first and then fall

Overview: strip steel price fluctuated widely in the third quarter, consumption rebounded, and inventory accelerated digestion and accumulated slightly after accelerated digestion. The Federal Reserve's interest rate hike policy has been implemented, and production restrictions are superimposed and the epidemic situation in some cities has been repeated, the market has been intertwined with long and short factors, and prices have fluctuated and adjusted, and the sentiment of manufacturers has improved compared with last month. Looking back at the hot-rolled strip market in September 2022, although the supply side has narrowed. On the demand side, the pace of downstream procurement has accelerated and transactions have increased.Prices on the raw material side have rebounded, but the Fed's interest rate hikes have been implemented overseas, and the macroeconomic environment continues to tighten. This month's strip steel price broke the low of the year , and manufacturers are cautious in their sentiment.

Looking forward to the hot-rolled strip market in October 2022, after the return of the short holiday, the main consumption of inventory is digested, and the supply side reduction is gradually reflected, but it is difficult to expect further increase demand investment on the demand side. Both supply and demand have declined, and overall contradictions may accumulate. At present, the production of cold-rolled base materials and hot coils remains high, and the inverted tape rolling situation may become an important pressure to suppress the rise in strip steel prices after the festival. Pay attention to the progress of steel plant production line maintenance after the holiday. This article reflects the market supply and demand structure in September and the trend forecast for October, as follows:

, Review of the domestic hot-rolled strip market in September

In September 2022, the national hot-rolled strip market price experienced the "N" font trend and then fell and rebounded. During the period, strip steel inventory accumulated slightly around the Mid-Autumn Festival holiday, the epidemic situation in the surrounding market recurred, and the apparent consumption of strip steel continued to be sluggish. After the Mid-Autumn Festival, with the increase in downstream inventory replenishment, the inventory of strip steel accelerated digestion, but the upstream and downstream profits of strip steel remained at the cost edge, and the purchasing enthusiasm and resilience were insufficient. In the early stage of National Day, manufacturers concentrated on restocking, transaction volume in northern steel pipe factories increased, and East China and South China were relatively sluggish. Cold rolling and galvanized products have average demand performance. Overall apparent consumption has increased slightly. Specifically, in terms of narrow bands: the national hot-rolled strip narrow band price is 4,057 yuan/ton at the end of September 2022, a month-on-month decrease of 21 yuan/ton. In terms of medium and broadband: At the end of September 2022, the average price of hot-rolled medium and broadband in the country was 4,060 yuan/ton, a month-on-month decrease of 12 yuan/ton, and the price difference between wide and narrow strip steel was slightly repaired and widened.

(I) From the steel billet market, the strip steel market,

Data source: Ganglian Data

As shown in Figure 1, this year, this year, Tangshan 45 series strip steel continued to be inverted. As of the end of September 2022, 145 strip steel was inverted about 100 yuan/ton, and some production lines of the billet factory were suspended. In addition, due to the impact of the epidemic this month, Tangshan Fengrun Platen Strip Steel has been restricted from starting work, and many downstream scaffolding pipes have been suspended, and overall transactions have been significantly reduced. At the end of September, the strip steel companies have no plans to resume production. is expected to continue to decline in October .

(II) From the settlement price of the North China strip steel conference, the strip steel market

2022 North China strip steel conference was held on September 23, 2022. Based on the spirit of the North China strip steel seminar on August 25, each company formulated the September strip steel settlement price and October strip steel guidance price based on its own production and operation conditions and market conditions. The specific details are as follows: North China strip steel conference: September strip steel settlement price: 3900 for below 355, 3900 for below 356-450, 3900 for 451-679, 3900 for above 680, 3930 for above 680; October strip steel guidance price is 4050 for acceptance plus 50.

September, the price of strip steel mills was lower than the market price again. Steel mills gave in some of the profits to take orders, and the price difference of wide and narrow specifications was restored to the normal range this month. As strip steel prices bottomed out and rebounded this month, the increase in the north was higher than that of East and South China, and the price difference between the north and south narrowed again. is expected to be the main market recovery in October , and East and South China are mainly rebounding. The north may fluctuate and adjust, and the north and south price difference may be repaired in October.

(III) From the perspective of the price difference between the main domestic regions, the strip steel market

Figure 3: Three-year data comparison chart of the north-south price difference between the 355 series strip steel

Data source: Ganglian Data

This year, the north-south price difference continued to fluctuate and adjust. At the end of September, northern strip steel bottomed out and rebounded, East China was weak in following the rise, and the price difference narrowed again. Inventory in East China is under relatively pressure this year. The Jiachen resources inflow from Northeast China and the low-priced Nangang resources suppressed the sales of local resources such as Zhongtian and Zhongtian reduced production. At the same time, the volume of resources such as Jinxi and Delong that were conventionally invested in the north has greatly reduced.

The South China market has added more new hot coil resources this year. The investment of resources such as Fujian Dadonghai, Wangang Hot Coil, Fujian Sangang and other resources has weak rise in the market's low-priced hot coil suppression strip prices, resulting in a decrease in the arrival of northern resources and the north-south price difference continues to be maintained at a low level. As of September 29, in terms of the north-south price difference, the narrow band: Wuxi -Tangshan price difference was 130 yuan/ton, an increase of 30 yuan/ton month-on-month; Lecong-Tangshan price difference was 80 yuan/ton, a decrease of 110 yuan/ton month-on-month. At present, the price difference does not meet the conditions for northern materials to move south. After the National Day holiday, inventory in various regions may accumulate to a certain extent. The inventory pressure in northern stocks is relatively light. In addition, steel companies have some maintenance plans, and prices are expected to rise slightly. The market in East and South China opened late, and may increase after the holiday. However, the demand for construction starts after the holiday may follow up slowly, and prices may have a risk of falling back after rising, and it will take a certain period of time to go from inverted to gradual repair of the north-south price difference. is expected to continue to hang upside down in the north and south in a short period of time after the holiday.

Figure 4: Three-year data comparison chart of 600 series strip steel north-south price difference

Data source: Ganglian Data

() From the downstream perspective, the strip steel market

From the perspective of Figure 5, this year, affected by the tight supply of small narrowband resources, the overall profit of scaffolding pipes in the second quarter improved compared with last year, and began to decline in the third quarter.

is currently seriously inverted with small narrow bands, some enterprises have stopped production and maintenance, downstream scaffolding pipes are restricted, and profits have declined. At present, only a few manufacturers of shelf pipes are produced normally. After the National Day, 145mm strip steel production enterprises have expectations of resumption of production. Currently, both supply and demand are weak, and there is expectation of supply exceeding demand in the later period. At present, some scaffolding pipes have been replenished in some centralized replenishment before the festival, but manufacturers are relatively cautious in their mood and purchasing mainly replenishing the replenishment on demand.

Figure 5: Three-year data comparison of the gross profit of Tangshan scaffolding

Data source: Ganglian Data

Welded pipe , in September, there were 29 sample welded steel pipe factories in China, with social inventory of 851,600 tons, a month-on-month decrease of 46,900 tons, and a year-on-year decrease of 60,200 tons; in terms of output, an increase of 851,600 tons, a week-on-month increase of 15,700 tons, and a month-on-month decrease of 42,100 tons. This month's output and social inventory both fell, prices rebounded after the decline in strip steel, and overall profit recovered this month. Transactions improved compared to last month.

As of September 29, 2022, the Tangshan area monitored by this website: the operating rate of 145mm strip steel is 50.00%, which is flat on the weekly and the month-on-month increase of 3.85%; the capacity utilization rate this week is 30.26%, which is flat on the weekly and the month-on-month decrease of 5.63%, which is 5.22% on the month-on-month decrease of 232mm; the operating rate of strip steel above 232mm is 53.33%, which is flat on the weekly and the month-on-month increase of 3.33%; the capacity utilization rate this week is 58.02%, which is flat on the weekly and the month-on-month increase of 3.67%.

Figure 6: Three-year data comparison chart of Tangshan welded pipe gross profit

Data source: Ganglian Data

2. Analysis of strip export form

(I) Changes in hot-rolled narrow strip export

In August 2022, the export volume of hot-rolled narrow strip was 22,036.32 tons, a month-on-month increase of 3.46% and a year-on-year increase of 44.76%. In August 2022, as domestic prices continued to decline, the volume of export resources increased and export volume increased. In the peak season of September, domestic and foreign demand improved, transactions increased, coupled with relatively low domestic steel prices, accumulated hot coil inventory, and narrowed the price gap between home and abroad. is expected to continue to increase in September compared with last year.

(II) Changes in the export of cold-rolled narrow strip steel

In August 2022, the national cold-rolled narrow strip steel export was 41,314.264 tons, a month-on-month decrease of 8.31% and a year-on-year decrease of 12.65%. Except for January, March, May and June, the export of cold-rolled narrow strip steel was better than last year, as of August data, all other months were lower than the same period last year. overall performance in the first and second quarters was relatively acceptable, and it declined in the third quarter. Currently, domestic cold resource orders shrink, and the hot and cold price difference is severely inverted, and domestic demand may not be able to digest the supply of steel slowly. At the same time, the margin of domestic welded pipe demand improved slightly, and transaction volume increased in September.However, based on the current strong expectations of economic balance sheet reduction, significant pressure on overseas consumption, and there may be expectations of narrowing between domestic and foreign price differences. In addition, the top 20 domestic environmental protection production restrictions are imminent in the fourth quarter, and steel prices may be relatively firm. It is expected that the export situation in the fourth quarter will not be optimistic, and steel exports may continue to maintain a downward trend.

. The domestic strip steel market may fluctuate upward in June

(I) Cost and supply

The survey results on September 28 showed that this week, the average iron and water-exclusive cost of mainstream sample steel mills in Tangshan was 2,853 yuan/ton, and the average billet included tax was 3,747 yuan/ton, which was increased by 6 yuan/ton on the weekly basis. Compared with the current ex-factory price of ordinary square billets on September 28, the steel mills lost an average of 67 yuan/ton, a weekly decrease of 64 yuan/ton.

Mysteel The operating rate of 63 hot-rolled strip steel manufacturers in the country this week was 62.50%, a week-on-month increase of 3.74%; a month-on-month increase of 4.77%; a month-on-month increase of 63.73%, a week-on-month increase of 3.87%; a month-on-month increase of 4.70%; a month-on-month increase of 1.5602 million tons this week, a week-on-month increase of 84,300 tons; a month-on-month increase of 128,400 tons; a month-on-month increase of 267,500 tons in the steel plant, a week-on-month decrease of 35,300 tons; a month-on-month decrease of 32,400 tons.

htmlStrip steel supply fell slightly in September. With the rebound after the price decline, the inventory in the strip steel mills gradually digested to normal levels. Shanxi high-inventory steel mills have slightly recovered this month. According to market feedback, the strip steel production line currently suffers serious losses, and some production lines have maintenance plans in October. In addition, the expectations for the 20 environmental protection production restrictions are strong, and there may be room for a slight decline in the later supply of strip steel.

(II) Demand area

The demand in September has increased significantly compared with August . The consumption of strip steel varieties has improved, and inventory has accelerated digestion. However, the overall downstream start is at a relatively low level, and manufacturers are still mainly replenishing the inventory as needed, and private investment capital is still relatively thin. Downstream profits are relatively thin, and most small factories continue to lose money. Observe the resilience of demand release in the later stage.

(III) Inventory area

As of September 29, 2022, the total weekly sample inventory of major hot-rolled strip steel markets in the country was 569,000 tons, an increase of 12,000 tons from last week, a decrease of 47,500 tons from the same period last month and a decrease of 135,600 tons from the same period last year. September is accompanied by the accumulation of inventory during the Mid-Autumn Festival holiday and the concentrated replenishment of the early National Day holiday in the late month, steel inventory has accumulated this month. At present, the supply of strip steel is relatively stable, and consumption has increased compared with last month. The overall supply and demand contradiction between strip steel has been slightly alleviated.

(IV) Macro-side

. The Federal Reserve announced its September interest rate resolution, raising interest rates by 75 basis points as scheduled, to 3.00-3.25%. The Bank of England raised interest rates by 50 basis points to 2.25%, in line with market expectations and has raised interest rates seven times in a row since December last year. The use of the Federal Reserve reverse repurchase tool reached US$2.36 trillion, a record high.

. The China Iron and Steel Association stated that since September, steel prices have fluctuated slightly. The main issues that need to be paid attention to in the later stage are: First, steel production has increased, and it is crucial to maintain stability on both sides of supply and demand. Second, the prices of coal, coke and scrap steel rebounded, and the task of reducing costs and increasing efficiency in the later period is still arduous.

. The General Command of the Fengrun District Epidemic Prevention and Control Work in Tangshan City decided to implement three-day temporary controls on the entire region of our district from 5:30 on September 18, 2022. The temporary control time will be extended for two days. From 0:00 on September 23, differentiated and precise control will be implemented across the region to ensure that the epidemic is "no input, no output, no rebound" and gradually and orderly restore production and living order.

To sum up, in October 2022, the hot-rolled strip market was supported by the expectations of 20 environmentally friendly production restrictions after the holiday, and there was a small expectation of production reduction; there was no expectation of further increase in demand investment on the demand side, and the sustained consumption intensity needs to be verified. Under the expectation of double decline in supply and demand, the national strip steel price may rise and fall after the holiday, and gradually tend to be cautious and wait-and-see. The inventory of strip steel may change from increase to decrease, and the inventory will be gradually digested in the later stage. The price difference between the tape and reel and the inverted price difference between the north and the south continue to be maintained. The market will be adjusted by sentiment and then return to fundamentals and operate. In the later period, with the impact of the maintenance of steel mills in various regions, there may be room for a phased rebound. comprehensively predicts that the strip steel market may rise first and then fall, and the overall average price level will rise compared with September. (My Steel Network)

. "Gold" is not "gold", "silver" is ten difficult to "silver". Whether the steel price can rise depends on these points

As the saying goes, an autumn rain is a cold. Today is October 3rd, the third day of the National Day holiday. The whole country is immersed in the festive atmosphere. I don’t know whether it is the arrangement of heaven or a coincidence, a new round of strong cold air is moving horizontally from northwest to southeast, and large-scale rainwater is coming. The cooling rate in some areas is large, and cold autumn is a foregone conclusion.

"Golden Nine" faded, demand in peak season was perjured, terminal transactions did not increase significantly, demand intensity was lower than expected, merchants were pessimistic, transactions were generally weak, terminal purchases were low, and more on-demand purchases were purchased. Although steel prices showed a certain "tail" trend at the end of the month, their overall performance was not impressive.

You should know that there is a saying in the industry that "Golden Nine is not 'gold', silver Oct is difficult to 'silver'". At present, the beginning of insufficient steel quality, with the arrival of "Silver Oct", as the market sentiment gradually improves and demand rebounds significantly, can the market go to a higher level?

Like most metal commodities, steel prices have risen and fallen this year. At the beginning of the year, driven by the "inflation trading" in the financial market driven by market improvement expectations, especially the strong economic growth, steel prices fluctuated and rose. Although the market was in the off-season of consumption in January, the price of rebar futures rose by more than 12% per month, once the largest increase in a single month in the second half of the year.

However, with strong expectations of interest rate hikes in overseas economies, the market quickly shifted from "inflation trading" to "recession trading". Since April, the steel market has been affected and continued to pull back, closing down for five consecutive months, and the market price has returned to the level in October 2021. Data shows that with the continuous pullback of steel prices, the rebar futures prices have successively fallen below the two integer marks of 5,000 and 4,000.

As the peak demand season arrives and the gradual implementation of previous measures to stabilize growth, the steel market is gradually showing signs of stabilization in September. "The demand side is also superimposed on the centralized release of terminal stocking demand before the National Day." Analysts believe that the pull of market demand has caused social inventory to fall again. By September 23, the social inventory of steel in 29 key cities across the country dropped to 10.0261 million tons, a decrease of 1.3% from the previous week.

driven by strong demand, steel futures and spot prices rose slightly from September 26 to September 30. Reasons for the rise: First, downstream construction sites and manufacturing factories replenish inventory before the National Day holiday, resulting in a significant increase in steel purchases; Second, on Wednesday, the market reported that steel mills sintered production restrictions due to environmental protection reasons, which led to a heated market speculation sentiment; Third, the ex-factory price of steel raw material coke rose by 100 yuan/ton, further pushing up the steel production cost. The PMI data of the steel industry released by the Internet of Things Steel Logistics Professional Committee in

also showed that the PMI of the steel industry rebounded by 0.5 percentage points month-on-month in September, which was a month-on-month rebound for two consecutive months, but the overall index level was still relatively low, at 46.6%, indicating that the steel industry has recovered slowly.

Why did steel prices not rise sharply last week? First, it is influenced by internal factors. The steel market is worried about the sustainability of demand growth. Steel traders are cautious in their mentality, and low-price shipments have become the mainstream of the market; second, it is interference from external factors. The US dollar index rose strongly this week, and the exchange rate of the US dollar against the RMB fell below 7.2 yuan, while currencies in other countries fell even more. The market is worried that commodities will reappear in a bear market, and the upward pressure on steel prices will increase.

Last week, a positive signal sent by the steel market was that both steel production and inventory declined, and the inventory pressure on steel mills and society in the early stage was reduced. Of course, this is directly related to downstream companies' active stocking and welcoming the long holiday.

According to statistics, as of September 30, the social inventory of steel in 30 key cities across the country was 9.55 million tons, a decrease of 460,000 tons from last week, a decrease of 4.72%; among them, the social inventory of construction steel was 5.14 million tons, a decrease of 380,000 tons from last week, a decrease of 6.59%; the social inventory of plates was 3.82 million tons, a decrease of 110,000 tons from last week, a decrease of 2.13%. In terms of steel raw materials, coking coal and coke prices were still the "most beautiful" in the market last week, futures prices have risen firmly, and spot prices are very willing to raise prices. As the energy tension in Europe becomes increasingly intense, according to statistics, the export price of Australian thermal coal is as high as RMB 3,000 per ton, forming a huge price difference with domestic coal prices, resulting in a very solid bottom of coking coal and coke prices, which is easy to rise but difficult to fall.

In the context of global steel production decline, the demand for iron ore is also gradually declining. Domestic iron ore prices are a downward trend, but one of the problems encountered at present is the supply of scrap steel. Due to the decrease in house demolition and factory reconstruction, the supply of scrap steel is also decreasing accordingly. This part of the gap is naturally replaced by iron ore, which is also one of the reasons why iron ore prices should not fall.

"The biggest market pressure in October mainly comes from the difficulty of eliminating pessimism." Analysts believe that on the one hand, it is the decline in overseas recession expectations and demand, and on the other hand, the industry generally believes that the current steel price is also higher than the expected winter storage acceptable price.

"But fundamentals still provide certain support to the market." In the view of analysts, relevant data show that the apparent consumption of crude steel in China in August has reached 78.66 million tons, an increase of 2.99 million tons from July. It is expected that the average daily demand intensity in September will also increase slightly compared with August, with a year-on-year increase of more than 10%, indicating that the actual demand in the market exceeded expectations.

When it comes to how to judge whether steel prices rise or fall after the National Day, we need to pay attention to the following three factors: steel demand after the holiday, northern steel production restrictions, and real estate market transaction data.

. Can the trend of amplifying steel market demand continue this week? The daily sales of steel in key cities of 180,000 tons are as the anchor point. If this data can be maintained above, the steel price will be relatively stable, and vice versa.

. Will there be a new production restriction policy for the northern region in October? Since steel mills are unwilling to take the initiative to reduce production, then administrative production reduction is the only way to reduce the supply of the steel market.

. The effect of positive and stimulating macroeconomic policies. On September 30, the central bank issued two positive news to support the recovery of the real estate industry, not setting down the mortgage interest rate and reducing the provident fund loan interest rate. The real estate market transaction data during the National Day holiday may become a touchstone for a series of favorable policies and deserves special attention. (China Steel Network)

. The real estate market has been facing three major positive news in a row. The central bank has taken action to release the signal of stable exchange rate

One week overview:

One week overview: 0 Macro News: The State Council’s fourth quarter work promotion meeting for stabilizing the economy emphasized the promotion of economic stability and upward trend; the real estate market welcomed three major positive news in a row; The central bank took action to release the signal of stabilizing the exchange rate ; China’s official manufacturing PMI returned to the expansion range in September; the number of people requested initial unemployment benefits in the United States that week was 193,000, falling to a five-month low.

data tracking: On the capital side, the central bank's open market achieved a net injection of 870 billion yuan in the week; Mysteel surveyed that the operating rates of 247 blast furnaces remained the same, and the operating rates of 110 coal washing plants nationwide rose by 2.25%; the prices of rebar, cement, and concrete rose, and the prices of iron ore and copper fell; the average daily retail sales of passenger cars in that week was 66,000, an increase of 25%; BDI fell by 3.08%.

Financial Market: Main commodity futures prices this week rise and fall. Among them, lead price rose by more than 4%; nickel fell by more than 8%. Among the global stock markets, all Chinese and European and American stock markets closed down, with the Dow Jones Index falling the highest, reaching 2.92%. The US dollar index closed at 112.22, down 0.72% weekly.

. Macro News

(I) Hot Topics

◎ The National Development and Reform Commission stated that it will accelerate the promotion of the first batch of policy development financial tools of 300 billion yuan to form physical work as soon as possible. At the same time, we will make good use of the new policy development financial tools of more than 300 billion yuan, do a good job in project screening and recommendation, accelerate capital investment, and promote the start of construction of the project as soon as possible.

◎On September 28, Premier Li Keqiang presided over a meeting to promote the work of stabilizing the economy in the fourth quarter and emphasized that we should focus on key tasks to implement policies, promote economic stability and ensure that we can operate within a reasonable range. Li Keqiang said that in response to the prominent contradiction of weak demand, we must try every means to expand investment and promote consumption, mobilize the enthusiasm of market entities and social capital, continue to implement a package of policies and continuity policies to stabilize the economy, and focus on making good use of two important policy tools recently issued. First, make good use of policy-based development financial tools and accelerate the construction of infrastructure projects. The second is to make good use of special re-lending and fiscal interest subsidies and other policies to accelerate the renewal and transformation of equipment in the fields of manufacturing, service, social services, etc.

◎ Premier Li Keqiang presided over the State Council Executive Meeting on September 26, and decided to implement phased deferral of some administrative and institutional fees and deposits to further help market entities reduce their burdens and alleviate their difficulties; deploy measures to promote the expansion and efficiency of government services to stimulate market vitality and facilitate people's lives; deploy measures to grasp autumn grain harvest and strengthen agricultural and rural infrastructure construction to ensure autumn income storage and improve agricultural production capacity; determine tax incentives for individual pensions for policy support and commercial operations to meet diversified needs; pass the "Regulations on Promoting the Development of Individual Industrial and Commercial Households (Draft)".

◎On September 26, the National Development and Reform Commission held a press conference to introduce the relevant situation of infrastructure. Zhang Zhihua, deputy director of the High Technology Department of the National Development and Reform Commission, said that the supply structure of new infrastructure should be optimized and the overall development efficiency should be improved. Give full play to the guiding and driving role of investment within the central budget. Make good use of medium- and long-term loans, local government special bonds, policy-based development financial tools, etc., increase support for the construction of new infrastructure, and enhance the enthusiasm of social capital to participate in investment. Zheng Jian, Director of the Basic Department of the National Development and Reform Commission: In the next step, the National Development and Reform Commission will focus on the list of 102 major projects in the "14th Five-Year Plan" and the "14th Five-Year Plan" modern comprehensive transportation system development plan, and insist on moderately and ahead of the progress of major projects.

◎On September 23, the 2022 third quarter regular meeting of the Monetary Policy Committee of the People's Bank of China was held. The meeting pointed out that we should promote the accelerated implementation and use of special loans for "guaranteeing and transferring buildings" and appropriately increase efforts as needed to guide commercial banks to provide supporting financing support. Deepen exchange rate marketization reform, enhance RMB exchange rate flexibility, guide enterprises and financial institutions to adhere to the concept of "risk neutral", strengthen expectations management, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Make good use of policy-based development financial tools, and focus on supporting infrastructure construction.

◎This week, the real estate market ushered in three major positive news. ① The People's Bank of China and the China Banking and Insurance Regulatory Commission issued a notice, deciding to phased adjustments to differentiated housing credit policies.City governments that meet the conditions may independently decide to maintain, lower or cancel the interest rate limit for the first-home loan issued in the local area before the end of 2022. According to the housing price index data of 70 large and medium-sized cities released by the National Bureau of Statistics, at least 23 cities meet the requirements of the central bank's new policy.

②The Ministry of Finance and the State Administration of Taxation announced personal income tax policies on supporting residents to purchase housing on September 30. From October 1, 2022 to December 31, 2023, taxpayers who sell their own houses and repurchase their houses in the market within one year after the sale of the current houses will be given tax refunds for the personal income tax paid for the sale of the current houses.

③People's Bank of China website reported on September 30 that the People's Bank of China decided to lower the interest rate of the first personal housing provident fund loan by 0.15 percentage points from October 1, 2022.

◎ In order to stabilize foreign exchange market expectations and strengthen macro-prudential management, the People's Bank of China decided to increase the foreign exchange risk reserve ratio of forward foreign exchange sales business from 0 to 20% from September 28, 2022.

◎National Foreign Exchange Market Self-Discipline Mechanism Video Conference was held on September 27. The meeting pointed out that the RMB exchange rate against the US dollar depreciated, but the depreciation was only half of the appreciation of the US dollar during the same period; the RMB appreciated significantly against the euro, pound and yen, and is one of the few strong currencies in the world at present. The meeting emphasized that the foreign exchange market is of great importance and maintaining stability is the first priority. The RMB exchange rate remains basically stable and has a solid foundation. It must be recognized that the exchange rate point is inaccurate, and two-way fluctuation is the norm. Don’t bet on the unilateral appreciation or depreciation of the RMB exchange rate. If you bet for a long time, you will lose. The meeting required that member units of the self-discipline mechanism should consciously maintain the basic stability of the foreign exchange market and resolutely curb the big ups and downs of exchange rates.

◎The People's Bank of China announced on the 28th that it will set up a special re-loan for equipment renovation, and specifically support financial institutions to provide loans to the manufacturing, social service fields, small and medium-sized enterprises, individual industrial and commercial households at an interest rate of no more than 3.2%. The special re-loan amount for equipment renewal and renovation is more than 200 billion yuan, with an interest rate of 1.75%, with a term of 1 year, and can be extended twice, with a period of 1 year.

◎Data from the National Bureau of Statistics shows that from January to August, the total profit of large-scale industrial enterprises across the country was 5525.4 billion yuan, a year-on-year decrease of 2.1%. Among them, the profits of ferrous metal smelting and rolling processing industries fell by 87.7% from January to August, ranking first among the 41 major industrial industries.

◎China's official manufacturing PMI in September was 50.1%, and rose 0.7 percentage points from the previous month. In September, as the package of policies to stabilize the economy continued to work, coupled with the decline of the impact of high temperature weather, the manufacturing industry's prosperity rebounded, and PMI returned to the expansion range. Caixin China's manufacturing PMI in September was 48.1, down 1.4 percentage points from August, the same as May, and the lowest in five months. Mainly affected by the rebound of the epidemic and related epidemic prevention measures, manufacturing production and demand have weakened, and the industry's prosperity continues to decline in the contraction range.

◎The number of initial unemployment claims in the United States fell to 193,000 in the week ending September 24, the lowest since the week of April 23, 2022. The market expects to be 215,000, compared with the previous value of 213,000. This shows that the labor market remains quite strong in amid economic uncertainty.

(II) Quick news

◎ The Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Ecology and Environment, and the Ministry of Transport jointly issued the "Implementation Opinions on Accelerating the Green Intelligent Development of Inland Ships", proposing that by 2025, breakthroughs will be made in key green power technologies such as liquefied natural gas (LNG), batteries, methanol, and hydrogen fuel, the level of intelligent technology of ships inland ships will be significantly improved, and the green intelligent standard and specification system for inland ships will be basically formed.

◎ On September 29, Ministry of Commerce spokesman Shu Jueting said that he would continue to promote the implementation of a series of policies and measures to expand automobile consumption, support the purchase and use of new energy vehicles, and accelerate the activation of the used car market. Implement policies and measures to promote the consumption of green smart home appliances, carry out old-for-new home appliances, and promote the rural areas of green smart home appliances. Promote the recovery and development of catering, accommodation and other industries.

◎ The Ministry of Finance, the State Administration of Taxation, and the Ministry of Industry and Information Technology issued an announcement on the extension of the policy of exempting vehicle purchase tax from new energy vehicles, and exempting vehicle purchase tax from the purchase date from January 1, 2023 to December 31, 2023.

◎ Data from the Ministry of Finance shows that from January to August, the total operating income of state-owned enterprises was 52351.91 billion yuan, a year-on-year increase of 9.5%. -August, the total profit of state-owned enterprises was 3011.08 billion , a year-on-year decrease of 1.5%.

◎ From January to August 2022, the investment in fixed assets of transportation reached 2.34 trillion yuan, a year-on-year increase of 6.6%. Among them, railway construction completed an investment of 402.8 billion yuan; highway construction completed an investment of 176.82 billion yuan, an increase of 9.5% year-on-year; water transportation construction completed an investment of 99.7 billion yuan, an increase of 8.6% year-on-year; civil aviation construction completed an investment of 67.1 billion yuan.

◎ Since the beginning of this year, my country's automobile exports have accelerated. China Association of Automobile Manufacturers showed that in August, automobile companies exported 308,000 vehicles, setting a new record high, achieving a monthly export of more than 300,000 vehicles for the first time. In the first eight months of this year, automobile companies exported 1.817 million vehicles, a year-on-year increase of 52.8%.

◎ China Machinery Industry Federation: From January to August, the added value of the machinery industry above the scale increased by 3.6% year-on-year; in August, the added value of the machinery industry above the scale increased by 4.2% year-on-year.

◎ China Shipbuilding Association: From January to August this year, among the new shipbuilding orders in the world, my country's liquefied natural gas transport ships accounted for nearly 30% of the global market share, reaching 27.2%.

◎ On September 26, the OECD lowered its global economic growth forecast in 2023 to 2.2%, previously 2.8%, lowered its U.S. economic growth forecast in 2023 to 0.5%, previously 1.2%, and lowered its eurozone economic growth forecast in 2023 to 0.3%, previously 1.6%.

◎ The Bank of England said it will conduct treasury bond purchase operations from September 28 to October 14, and postpone the operation of selling treasury bonds until October 31; the goal is to restore an orderly market environment. The Monetary Policy Committee's target of cutting £80 billion in Treasury bond holdings remains unchanged.

◎ The money market is expected to raise interest rates by 175 basis points by the end of November. Traders expect the Bank of England interest rates to rise to 6% by November 2023, the highest level since 2001.

◎ Germany's CPI rose 10% year-on-year in September, setting a record high.

◎ On September 22, the Bank of Japan announced after the monetary policy meeting that it would continue to adhere to the current ultra-loose monetary policy and maintain interest rate levels unchanged.

◎ Beixi Natural Gas Pipeline Company found that the three pipelines of the Beixi Natural Gas Pipeline System were damaged, and the damage was unprecedented. Nord Stream Natural Gas Pipeline Company is now unable to estimate when the gas delivery infrastructure will be restored.

. Data tracking

(I) Funding side

(II) Industry data

html l38

. Financial market overview

In the week, in terms of commodity futures, the prices of major commodity futures rose and fell. Among them, lead prices rose by more than 4%; nickel fell by more than 8%. In terms of global stock markets, both Chinese and European and American stock markets closed down, with the Dow Jones Index falling the highest, reaching 2.92%. In the foreign exchange market, the US dollar index closed at 112.22, down 0.72%.

. Next week's key data

(I) The United States will release the September non-agricultural employment report

Time: Friday (10/7)

Comments: Market expectations increase by 275,000, lower than 315,000 in August. The September non-farm report will lay the foundation for the direction of the Federal Reserve's monetary policy in November to a certain extent. If it is significantly lower than market expectations, the market's expectations for the Federal Reserve's sharp interest rate hike of 75 basis points in November will heat up, and the US dollar is expected to strengthen; on the contrary, if the data is significantly improved, the US dollar will face selling pressure.

(II) A list of key data next week

(China Steel Network)

Looking forward to the hot-rolled strip market in October 2022, after the return of the short holiday, the main consumption of inventory is digested, and the supply side reduction is gradually reflected, but it is difficult to expect further increase demand investment on the demand side. Both supply and demand have declined, and overall contradictions may accumulate. At present, the production of cold-rolled base materials and hot coils remains high, and the inverted tape rolling situation may become an important pressure to suppress the rise in strip steel prices after the festival. Pay attention to the progress of steel plant production line maintenance after the holiday. This article reflects the market supply and demand structure in September and the trend forecast for October, as follows:

, Review of the domestic hot-rolled strip market in September

In September 2022, the national hot-rolled strip market price experienced the "N" font trend and then fell and rebounded. During the period, strip steel inventory accumulated slightly around the Mid-Autumn Festival holiday, the epidemic situation in the surrounding market recurred, and the apparent consumption of strip steel continued to be sluggish. After the Mid-Autumn Festival, with the increase in downstream inventory replenishment, the inventory of strip steel accelerated digestion, but the upstream and downstream profits of strip steel remained at the cost edge, and the purchasing enthusiasm and resilience were insufficient. In the early stage of National Day, manufacturers concentrated on restocking, transaction volume in northern steel pipe factories increased, and East China and South China were relatively sluggish. Cold rolling and galvanized products have average demand performance. Overall apparent consumption has increased slightly. Specifically, in terms of narrow bands: the national hot-rolled strip narrow band price is 4,057 yuan/ton at the end of September 2022, a month-on-month decrease of 21 yuan/ton. In terms of medium and broadband: At the end of September 2022, the average price of hot-rolled medium and broadband in the country was 4,060 yuan/ton, a month-on-month decrease of 12 yuan/ton, and the price difference between wide and narrow strip steel was slightly repaired and widened.

(I) From the steel billet market, the strip steel market,

Data source: Ganglian Data

As shown in Figure 1, this year, this year, Tangshan 45 series strip steel continued to be inverted. As of the end of September 2022, 145 strip steel was inverted about 100 yuan/ton, and some production lines of the billet factory were suspended. In addition, due to the impact of the epidemic this month, Tangshan Fengrun Platen Strip Steel has been restricted from starting work, and many downstream scaffolding pipes have been suspended, and overall transactions have been significantly reduced. At the end of September, the strip steel companies have no plans to resume production. is expected to continue to decline in October .

(II) From the settlement price of the North China strip steel conference, the strip steel market

2022 North China strip steel conference was held on September 23, 2022. Based on the spirit of the North China strip steel seminar on August 25, each company formulated the September strip steel settlement price and October strip steel guidance price based on its own production and operation conditions and market conditions. The specific details are as follows: North China strip steel conference: September strip steel settlement price: 3900 for below 355, 3900 for below 356-450, 3900 for 451-679, 3900 for above 680, 3930 for above 680; October strip steel guidance price is 4050 for acceptance plus 50.

September, the price of strip steel mills was lower than the market price again. Steel mills gave in some of the profits to take orders, and the price difference of wide and narrow specifications was restored to the normal range this month. As strip steel prices bottomed out and rebounded this month, the increase in the north was higher than that of East and South China, and the price difference between the north and south narrowed again. is expected to be the main market recovery in October , and East and South China are mainly rebounding. The north may fluctuate and adjust, and the north and south price difference may be repaired in October.

(III) From the perspective of the price difference between the main domestic regions, the strip steel market

Figure 3: Three-year data comparison chart of the north-south price difference between the 355 series strip steel

Data source: Ganglian Data

This year, the north-south price difference continued to fluctuate and adjust. At the end of September, northern strip steel bottomed out and rebounded, East China was weak in following the rise, and the price difference narrowed again. Inventory in East China is under relatively pressure this year. The Jiachen resources inflow from Northeast China and the low-priced Nangang resources suppressed the sales of local resources such as Zhongtian and Zhongtian reduced production. At the same time, the volume of resources such as Jinxi and Delong that were conventionally invested in the north has greatly reduced.

The South China market has added more new hot coil resources this year. The investment of resources such as Fujian Dadonghai, Wangang Hot Coil, Fujian Sangang and other resources has weak rise in the market's low-priced hot coil suppression strip prices, resulting in a decrease in the arrival of northern resources and the north-south price difference continues to be maintained at a low level. As of September 29, in terms of the north-south price difference, the narrow band: Wuxi -Tangshan price difference was 130 yuan/ton, an increase of 30 yuan/ton month-on-month; Lecong-Tangshan price difference was 80 yuan/ton, a decrease of 110 yuan/ton month-on-month. At present, the price difference does not meet the conditions for northern materials to move south. After the National Day holiday, inventory in various regions may accumulate to a certain extent. The inventory pressure in northern stocks is relatively light. In addition, steel companies have some maintenance plans, and prices are expected to rise slightly. The market in East and South China opened late, and may increase after the holiday. However, the demand for construction starts after the holiday may follow up slowly, and prices may have a risk of falling back after rising, and it will take a certain period of time to go from inverted to gradual repair of the north-south price difference. is expected to continue to hang upside down in the north and south in a short period of time after the holiday.

Figure 4: Three-year data comparison chart of 600 series strip steel north-south price difference

Data source: Ganglian Data

() From the downstream perspective, the strip steel market

From the perspective of Figure 5, this year, affected by the tight supply of small narrowband resources, the overall profit of scaffolding pipes in the second quarter improved compared with last year, and began to decline in the third quarter.

is currently seriously inverted with small narrow bands, some enterprises have stopped production and maintenance, downstream scaffolding pipes are restricted, and profits have declined. At present, only a few manufacturers of shelf pipes are produced normally. After the National Day, 145mm strip steel production enterprises have expectations of resumption of production. Currently, both supply and demand are weak, and there is expectation of supply exceeding demand in the later period. At present, some scaffolding pipes have been replenished in some centralized replenishment before the festival, but manufacturers are relatively cautious in their mood and purchasing mainly replenishing the replenishment on demand.

Figure 5: Three-year data comparison of the gross profit of Tangshan scaffolding

Data source: Ganglian Data

Welded pipe , in September, there were 29 sample welded steel pipe factories in China, with social inventory of 851,600 tons, a month-on-month decrease of 46,900 tons, and a year-on-year decrease of 60,200 tons; in terms of output, an increase of 851,600 tons, a week-on-month increase of 15,700 tons, and a month-on-month decrease of 42,100 tons. This month's output and social inventory both fell, prices rebounded after the decline in strip steel, and overall profit recovered this month. Transactions improved compared to last month.

As of September 29, 2022, the Tangshan area monitored by this website: the operating rate of 145mm strip steel is 50.00%, which is flat on the weekly and the month-on-month increase of 3.85%; the capacity utilization rate this week is 30.26%, which is flat on the weekly and the month-on-month decrease of 5.63%, which is 5.22% on the month-on-month decrease of 232mm; the operating rate of strip steel above 232mm is 53.33%, which is flat on the weekly and the month-on-month increase of 3.33%; the capacity utilization rate this week is 58.02%, which is flat on the weekly and the month-on-month increase of 3.67%.

Figure 6: Three-year data comparison chart of Tangshan welded pipe gross profit

Data source: Ganglian Data

2. Analysis of strip export form

(I) Changes in hot-rolled narrow strip export

In August 2022, the export volume of hot-rolled narrow strip was 22,036.32 tons, a month-on-month increase of 3.46% and a year-on-year increase of 44.76%. In August 2022, as domestic prices continued to decline, the volume of export resources increased and export volume increased. In the peak season of September, domestic and foreign demand improved, transactions increased, coupled with relatively low domestic steel prices, accumulated hot coil inventory, and narrowed the price gap between home and abroad. is expected to continue to increase in September compared with last year.

(II) Changes in the export of cold-rolled narrow strip steel

In August 2022, the national cold-rolled narrow strip steel export was 41,314.264 tons, a month-on-month decrease of 8.31% and a year-on-year decrease of 12.65%. Except for January, March, May and June, the export of cold-rolled narrow strip steel was better than last year, as of August data, all other months were lower than the same period last year. overall performance in the first and second quarters was relatively acceptable, and it declined in the third quarter. Currently, domestic cold resource orders shrink, and the hot and cold price difference is severely inverted, and domestic demand may not be able to digest the supply of steel slowly. At the same time, the margin of domestic welded pipe demand improved slightly, and transaction volume increased in September.However, based on the current strong expectations of economic balance sheet reduction, significant pressure on overseas consumption, and there may be expectations of narrowing between domestic and foreign price differences. In addition, the top 20 domestic environmental protection production restrictions are imminent in the fourth quarter, and steel prices may be relatively firm. It is expected that the export situation in the fourth quarter will not be optimistic, and steel exports may continue to maintain a downward trend.

. The domestic strip steel market may fluctuate upward in June

(I) Cost and supply

The survey results on September 28 showed that this week, the average iron and water-exclusive cost of mainstream sample steel mills in Tangshan was 2,853 yuan/ton, and the average billet included tax was 3,747 yuan/ton, which was increased by 6 yuan/ton on the weekly basis. Compared with the current ex-factory price of ordinary square billets on September 28, the steel mills lost an average of 67 yuan/ton, a weekly decrease of 64 yuan/ton.

Mysteel The operating rate of 63 hot-rolled strip steel manufacturers in the country this week was 62.50%, a week-on-month increase of 3.74%; a month-on-month increase of 4.77%; a month-on-month increase of 63.73%, a week-on-month increase of 3.87%; a month-on-month increase of 4.70%; a month-on-month increase of 1.5602 million tons this week, a week-on-month increase of 84,300 tons; a month-on-month increase of 128,400 tons; a month-on-month increase of 267,500 tons in the steel plant, a week-on-month decrease of 35,300 tons; a month-on-month decrease of 32,400 tons.

htmlStrip steel supply fell slightly in September. With the rebound after the price decline, the inventory in the strip steel mills gradually digested to normal levels. Shanxi high-inventory steel mills have slightly recovered this month. According to market feedback, the strip steel production line currently suffers serious losses, and some production lines have maintenance plans in October. In addition, the expectations for the 20 environmental protection production restrictions are strong, and there may be room for a slight decline in the later supply of strip steel.

(II) Demand area

The demand in September has increased significantly compared with August . The consumption of strip steel varieties has improved, and inventory has accelerated digestion. However, the overall downstream start is at a relatively low level, and manufacturers are still mainly replenishing the inventory as needed, and private investment capital is still relatively thin. Downstream profits are relatively thin, and most small factories continue to lose money. Observe the resilience of demand release in the later stage.

(III) Inventory area

As of September 29, 2022, the total weekly sample inventory of major hot-rolled strip steel markets in the country was 569,000 tons, an increase of 12,000 tons from last week, a decrease of 47,500 tons from the same period last month and a decrease of 135,600 tons from the same period last year. September is accompanied by the accumulation of inventory during the Mid-Autumn Festival holiday and the concentrated replenishment of the early National Day holiday in the late month, steel inventory has accumulated this month. At present, the supply of strip steel is relatively stable, and consumption has increased compared with last month. The overall supply and demand contradiction between strip steel has been slightly alleviated.

(IV) Macro-side

. The Federal Reserve announced its September interest rate resolution, raising interest rates by 75 basis points as scheduled, to 3.00-3.25%. The Bank of England raised interest rates by 50 basis points to 2.25%, in line with market expectations and has raised interest rates seven times in a row since December last year. The use of the Federal Reserve reverse repurchase tool reached US$2.36 trillion, a record high.

. The China Iron and Steel Association stated that since September, steel prices have fluctuated slightly. The main issues that need to be paid attention to in the later stage are: First, steel production has increased, and it is crucial to maintain stability on both sides of supply and demand. Second, the prices of coal, coke and scrap steel rebounded, and the task of reducing costs and increasing efficiency in the later period is still arduous.

. The General Command of the Fengrun District Epidemic Prevention and Control Work in Tangshan City decided to implement three-day temporary controls on the entire region of our district from 5:30 on September 18, 2022. The temporary control time will be extended for two days. From 0:00 on September 23, differentiated and precise control will be implemented across the region to ensure that the epidemic is "no input, no output, no rebound" and gradually and orderly restore production and living order.

To sum up, in October 2022, the hot-rolled strip market was supported by the expectations of 20 environmentally friendly production restrictions after the holiday, and there was a small expectation of production reduction; there was no expectation of further increase in demand investment on the demand side, and the sustained consumption intensity needs to be verified. Under the expectation of double decline in supply and demand, the national strip steel price may rise and fall after the holiday, and gradually tend to be cautious and wait-and-see. The inventory of strip steel may change from increase to decrease, and the inventory will be gradually digested in the later stage. The price difference between the tape and reel and the inverted price difference between the north and the south continue to be maintained. The market will be adjusted by sentiment and then return to fundamentals and operate. In the later period, with the impact of the maintenance of steel mills in various regions, there may be room for a phased rebound. comprehensively predicts that the strip steel market may rise first and then fall, and the overall average price level will rise compared with September. (My Steel Network)

. "Gold" is not "gold", "silver" is ten difficult to "silver". Whether the steel price can rise depends on these points

As the saying goes, an autumn rain is a cold. Today is October 3rd, the third day of the National Day holiday. The whole country is immersed in the festive atmosphere. I don’t know whether it is the arrangement of heaven or a coincidence, a new round of strong cold air is moving horizontally from northwest to southeast, and large-scale rainwater is coming. The cooling rate in some areas is large, and cold autumn is a foregone conclusion.

"Golden Nine" faded, demand in peak season was perjured, terminal transactions did not increase significantly, demand intensity was lower than expected, merchants were pessimistic, transactions were generally weak, terminal purchases were low, and more on-demand purchases were purchased. Although steel prices showed a certain "tail" trend at the end of the month, their overall performance was not impressive.

You should know that there is a saying in the industry that "Golden Nine is not 'gold', silver Oct is difficult to 'silver'". At present, the beginning of insufficient steel quality, with the arrival of "Silver Oct", as the market sentiment gradually improves and demand rebounds significantly, can the market go to a higher level?

Like most metal commodities, steel prices have risen and fallen this year. At the beginning of the year, driven by the "inflation trading" in the financial market driven by market improvement expectations, especially the strong economic growth, steel prices fluctuated and rose. Although the market was in the off-season of consumption in January, the price of rebar futures rose by more than 12% per month, once the largest increase in a single month in the second half of the year.

However, with strong expectations of interest rate hikes in overseas economies, the market quickly shifted from "inflation trading" to "recession trading". Since April, the steel market has been affected and continued to pull back, closing down for five consecutive months, and the market price has returned to the level in October 2021. Data shows that with the continuous pullback of steel prices, the rebar futures prices have successively fallen below the two integer marks of 5,000 and 4,000.

As the peak demand season arrives and the gradual implementation of previous measures to stabilize growth, the steel market is gradually showing signs of stabilization in September. "The demand side is also superimposed on the centralized release of terminal stocking demand before the National Day." Analysts believe that the pull of market demand has caused social inventory to fall again. By September 23, the social inventory of steel in 29 key cities across the country dropped to 10.0261 million tons, a decrease of 1.3% from the previous week.

driven by strong demand, steel futures and spot prices rose slightly from September 26 to September 30. Reasons for the rise: First, downstream construction sites and manufacturing factories replenish inventory before the National Day holiday, resulting in a significant increase in steel purchases; Second, on Wednesday, the market reported that steel mills sintered production restrictions due to environmental protection reasons, which led to a heated market speculation sentiment; Third, the ex-factory price of steel raw material coke rose by 100 yuan/ton, further pushing up the steel production cost. The PMI data of the steel industry released by the Internet of Things Steel Logistics Professional Committee in

also showed that the PMI of the steel industry rebounded by 0.5 percentage points month-on-month in September, which was a month-on-month rebound for two consecutive months, but the overall index level was still relatively low, at 46.6%, indicating that the steel industry has recovered slowly.

Why did steel prices not rise sharply last week? First, it is influenced by internal factors. The steel market is worried about the sustainability of demand growth. Steel traders are cautious in their mentality, and low-price shipments have become the mainstream of the market; second, it is interference from external factors. The US dollar index rose strongly this week, and the exchange rate of the US dollar against the RMB fell below 7.2 yuan, while currencies in other countries fell even more. The market is worried that commodities will reappear in a bear market, and the upward pressure on steel prices will increase.

Last week, a positive signal sent by the steel market was that both steel production and inventory declined, and the inventory pressure on steel mills and society in the early stage was reduced. Of course, this is directly related to downstream companies' active stocking and welcoming the long holiday.

According to statistics, as of September 30, the social inventory of steel in 30 key cities across the country was 9.55 million tons, a decrease of 460,000 tons from last week, a decrease of 4.72%; among them, the social inventory of construction steel was 5.14 million tons, a decrease of 380,000 tons from last week, a decrease of 6.59%; the social inventory of plates was 3.82 million tons, a decrease of 110,000 tons from last week, a decrease of 2.13%. In terms of steel raw materials, coking coal and coke prices were still the "most beautiful" in the market last week, futures prices have risen firmly, and spot prices are very willing to raise prices. As the energy tension in Europe becomes increasingly intense, according to statistics, the export price of Australian thermal coal is as high as RMB 3,000 per ton, forming a huge price difference with domestic coal prices, resulting in a very solid bottom of coking coal and coke prices, which is easy to rise but difficult to fall.

In the context of global steel production decline, the demand for iron ore is also gradually declining. Domestic iron ore prices are a downward trend, but one of the problems encountered at present is the supply of scrap steel. Due to the decrease in house demolition and factory reconstruction, the supply of scrap steel is also decreasing accordingly. This part of the gap is naturally replaced by iron ore, which is also one of the reasons why iron ore prices should not fall.

"The biggest market pressure in October mainly comes from the difficulty of eliminating pessimism." Analysts believe that on the one hand, it is the decline in overseas recession expectations and demand, and on the other hand, the industry generally believes that the current steel price is also higher than the expected winter storage acceptable price.

"But fundamentals still provide certain support to the market." In the view of analysts, relevant data show that the apparent consumption of crude steel in China in August has reached 78.66 million tons, an increase of 2.99 million tons from July. It is expected that the average daily demand intensity in September will also increase slightly compared with August, with a year-on-year increase of more than 10%, indicating that the actual demand in the market exceeded expectations.

When it comes to how to judge whether steel prices rise or fall after the National Day, we need to pay attention to the following three factors: steel demand after the holiday, northern steel production restrictions, and real estate market transaction data.

. Can the trend of amplifying steel market demand continue this week? The daily sales of steel in key cities of 180,000 tons are as the anchor point. If this data can be maintained above, the steel price will be relatively stable, and vice versa.

. Will there be a new production restriction policy for the northern region in October? Since steel mills are unwilling to take the initiative to reduce production, then administrative production reduction is the only way to reduce the supply of the steel market.

. The effect of positive and stimulating macroeconomic policies. On September 30, the central bank issued two positive news to support the recovery of the real estate industry, not setting down the mortgage interest rate and reducing the provident fund loan interest rate. The real estate market transaction data during the National Day holiday may become a touchstone for a series of favorable policies and deserves special attention. (China Steel Network)

. The real estate market has been facing three major positive news in a row. The central bank has taken action to release the signal of stable exchange rate

One week overview:

One week overview: 0 Macro News: The State Council’s fourth quarter work promotion meeting for stabilizing the economy emphasized the promotion of economic stability and upward trend; the real estate market welcomed three major positive news in a row; The central bank took action to release the signal of stabilizing the exchange rate ; China’s official manufacturing PMI returned to the expansion range in September; the number of people requested initial unemployment benefits in the United States that week was 193,000, falling to a five-month low.

data tracking: On the capital side, the central bank's open market achieved a net injection of 870 billion yuan in the week; Mysteel surveyed that the operating rates of 247 blast furnaces remained the same, and the operating rates of 110 coal washing plants nationwide rose by 2.25%; the prices of rebar, cement, and concrete rose, and the prices of iron ore and copper fell; the average daily retail sales of passenger cars in that week was 66,000, an increase of 25%; BDI fell by 3.08%.

Financial Market: Main commodity futures prices this week rise and fall. Among them, lead price rose by more than 4%; nickel fell by more than 8%. Among the global stock markets, all Chinese and European and American stock markets closed down, with the Dow Jones Index falling the highest, reaching 2.92%. The US dollar index closed at 112.22, down 0.72% weekly.

. Macro News

(I) Hot Topics

◎ The National Development and Reform Commission stated that it will accelerate the promotion of the first batch of policy development financial tools of 300 billion yuan to form physical work as soon as possible. At the same time, we will make good use of the new policy development financial tools of more than 300 billion yuan, do a good job in project screening and recommendation, accelerate capital investment, and promote the start of construction of the project as soon as possible.

◎On September 28, Premier Li Keqiang presided over a meeting to promote the work of stabilizing the economy in the fourth quarter and emphasized that we should focus on key tasks to implement policies, promote economic stability and ensure that we can operate within a reasonable range. Li Keqiang said that in response to the prominent contradiction of weak demand, we must try every means to expand investment and promote consumption, mobilize the enthusiasm of market entities and social capital, continue to implement a package of policies and continuity policies to stabilize the economy, and focus on making good use of two important policy tools recently issued. First, make good use of policy-based development financial tools and accelerate the construction of infrastructure projects. The second is to make good use of special re-lending and fiscal interest subsidies and other policies to accelerate the renewal and transformation of equipment in the fields of manufacturing, service, social services, etc.

◎ Premier Li Keqiang presided over the State Council Executive Meeting on September 26, and decided to implement phased deferral of some administrative and institutional fees and deposits to further help market entities reduce their burdens and alleviate their difficulties; deploy measures to promote the expansion and efficiency of government services to stimulate market vitality and facilitate people's lives; deploy measures to grasp autumn grain harvest and strengthen agricultural and rural infrastructure construction to ensure autumn income storage and improve agricultural production capacity; determine tax incentives for individual pensions for policy support and commercial operations to meet diversified needs; pass the "Regulations on Promoting the Development of Individual Industrial and Commercial Households (Draft)".

◎On September 26, the National Development and Reform Commission held a press conference to introduce the relevant situation of infrastructure. Zhang Zhihua, deputy director of the High Technology Department of the National Development and Reform Commission, said that the supply structure of new infrastructure should be optimized and the overall development efficiency should be improved. Give full play to the guiding and driving role of investment within the central budget. Make good use of medium- and long-term loans, local government special bonds, policy-based development financial tools, etc., increase support for the construction of new infrastructure, and enhance the enthusiasm of social capital to participate in investment. Zheng Jian, Director of the Basic Department of the National Development and Reform Commission: In the next step, the National Development and Reform Commission will focus on the list of 102 major projects in the "14th Five-Year Plan" and the "14th Five-Year Plan" modern comprehensive transportation system development plan, and insist on moderately and ahead of the progress of major projects.

◎On September 23, the 2022 third quarter regular meeting of the Monetary Policy Committee of the People's Bank of China was held. The meeting pointed out that we should promote the accelerated implementation and use of special loans for "guaranteeing and transferring buildings" and appropriately increase efforts as needed to guide commercial banks to provide supporting financing support. Deepen exchange rate marketization reform, enhance RMB exchange rate flexibility, guide enterprises and financial institutions to adhere to the concept of "risk neutral", strengthen expectations management, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Make good use of policy-based development financial tools, and focus on supporting infrastructure construction.

◎This week, the real estate market ushered in three major positive news. ① The People's Bank of China and the China Banking and Insurance Regulatory Commission issued a notice, deciding to phased adjustments to differentiated housing credit policies.City governments that meet the conditions may independently decide to maintain, lower or cancel the interest rate limit for the first-home loan issued in the local area before the end of 2022. According to the housing price index data of 70 large and medium-sized cities released by the National Bureau of Statistics, at least 23 cities meet the requirements of the central bank's new policy.

②The Ministry of Finance and the State Administration of Taxation announced personal income tax policies on supporting residents to purchase housing on September 30. From October 1, 2022 to December 31, 2023, taxpayers who sell their own houses and repurchase their houses in the market within one year after the sale of the current houses will be given tax refunds for the personal income tax paid for the sale of the current houses.

③People's Bank of China website reported on September 30 that the People's Bank of China decided to lower the interest rate of the first personal housing provident fund loan by 0.15 percentage points from October 1, 2022.

◎ In order to stabilize foreign exchange market expectations and strengthen macro-prudential management, the People's Bank of China decided to increase the foreign exchange risk reserve ratio of forward foreign exchange sales business from 0 to 20% from September 28, 2022.

◎National Foreign Exchange Market Self-Discipline Mechanism Video Conference was held on September 27. The meeting pointed out that the RMB exchange rate against the US dollar depreciated, but the depreciation was only half of the appreciation of the US dollar during the same period; the RMB appreciated significantly against the euro, pound and yen, and is one of the few strong currencies in the world at present. The meeting emphasized that the foreign exchange market is of great importance and maintaining stability is the first priority. The RMB exchange rate remains basically stable and has a solid foundation. It must be recognized that the exchange rate point is inaccurate, and two-way fluctuation is the norm. Don’t bet on the unilateral appreciation or depreciation of the RMB exchange rate. If you bet for a long time, you will lose. The meeting required that member units of the self-discipline mechanism should consciously maintain the basic stability of the foreign exchange market and resolutely curb the big ups and downs of exchange rates.

◎The People's Bank of China announced on the 28th that it will set up a special re-loan for equipment renovation, and specifically support financial institutions to provide loans to the manufacturing, social service fields, small and medium-sized enterprises, individual industrial and commercial households at an interest rate of no more than 3.2%. The special re-loan amount for equipment renewal and renovation is more than 200 billion yuan, with an interest rate of 1.75%, with a term of 1 year, and can be extended twice, with a period of 1 year.

◎Data from the National Bureau of Statistics shows that from January to August, the total profit of large-scale industrial enterprises across the country was 5525.4 billion yuan, a year-on-year decrease of 2.1%. Among them, the profits of ferrous metal smelting and rolling processing industries fell by 87.7% from January to August, ranking first among the 41 major industrial industries.

◎China's official manufacturing PMI in September was 50.1%, and rose 0.7 percentage points from the previous month. In September, as the package of policies to stabilize the economy continued to work, coupled with the decline of the impact of high temperature weather, the manufacturing industry's prosperity rebounded, and PMI returned to the expansion range. Caixin China's manufacturing PMI in September was 48.1, down 1.4 percentage points from August, the same as May, and the lowest in five months. Mainly affected by the rebound of the epidemic and related epidemic prevention measures, manufacturing production and demand have weakened, and the industry's prosperity continues to decline in the contraction range.

◎The number of initial unemployment claims in the United States fell to 193,000 in the week ending September 24, the lowest since the week of April 23, 2022. The market expects to be 215,000, compared with the previous value of 213,000. This shows that the labor market remains quite strong in amid economic uncertainty.

(II) Quick news

◎ The Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Ecology and Environment, and the Ministry of Transport jointly issued the "Implementation Opinions on Accelerating the Green Intelligent Development of Inland Ships", proposing that by 2025, breakthroughs will be made in key green power technologies such as liquefied natural gas (LNG), batteries, methanol, and hydrogen fuel, the level of intelligent technology of ships inland ships will be significantly improved, and the green intelligent standard and specification system for inland ships will be basically formed.

◎ On September 29, Ministry of Commerce spokesman Shu Jueting said that he would continue to promote the implementation of a series of policies and measures to expand automobile consumption, support the purchase and use of new energy vehicles, and accelerate the activation of the used car market. Implement policies and measures to promote the consumption of green smart home appliances, carry out old-for-new home appliances, and promote the rural areas of green smart home appliances. Promote the recovery and development of catering, accommodation and other industries.

◎ The Ministry of Finance, the State Administration of Taxation, and the Ministry of Industry and Information Technology issued an announcement on the extension of the policy of exempting vehicle purchase tax from new energy vehicles, and exempting vehicle purchase tax from the purchase date from January 1, 2023 to December 31, 2023.

◎ Data from the Ministry of Finance shows that from January to August, the total operating income of state-owned enterprises was 52351.91 billion yuan, a year-on-year increase of 9.5%. -August, the total profit of state-owned enterprises was 3011.08 billion , a year-on-year decrease of 1.5%.

◎ From January to August 2022, the investment in fixed assets of transportation reached 2.34 trillion yuan, a year-on-year increase of 6.6%. Among them, railway construction completed an investment of 402.8 billion yuan; highway construction completed an investment of 176.82 billion yuan, an increase of 9.5% year-on-year; water transportation construction completed an investment of 99.7 billion yuan, an increase of 8.6% year-on-year; civil aviation construction completed an investment of 67.1 billion yuan.

◎ Since the beginning of this year, my country's automobile exports have accelerated. China Association of Automobile Manufacturers showed that in August, automobile companies exported 308,000 vehicles, setting a new record high, achieving a monthly export of more than 300,000 vehicles for the first time. In the first eight months of this year, automobile companies exported 1.817 million vehicles, a year-on-year increase of 52.8%.

◎ China Machinery Industry Federation: From January to August, the added value of the machinery industry above the scale increased by 3.6% year-on-year; in August, the added value of the machinery industry above the scale increased by 4.2% year-on-year.

◎ China Shipbuilding Association: From January to August this year, among the new shipbuilding orders in the world, my country's liquefied natural gas transport ships accounted for nearly 30% of the global market share, reaching 27.2%.

◎ On September 26, the OECD lowered its global economic growth forecast in 2023 to 2.2%, previously 2.8%, lowered its U.S. economic growth forecast in 2023 to 0.5%, previously 1.2%, and lowered its eurozone economic growth forecast in 2023 to 0.3%, previously 1.6%.

◎ The Bank of England said it will conduct treasury bond purchase operations from September 28 to October 14, and postpone the operation of selling treasury bonds until October 31; the goal is to restore an orderly market environment. The Monetary Policy Committee's target of cutting £80 billion in Treasury bond holdings remains unchanged.

◎ The money market is expected to raise interest rates by 175 basis points by the end of November. Traders expect the Bank of England interest rates to rise to 6% by November 2023, the highest level since 2001.

◎ Germany's CPI rose 10% year-on-year in September, setting a record high.

◎ On September 22, the Bank of Japan announced after the monetary policy meeting that it would continue to adhere to the current ultra-loose monetary policy and maintain interest rate levels unchanged.

◎ Beixi Natural Gas Pipeline Company found that the three pipelines of the Beixi Natural Gas Pipeline System were damaged, and the damage was unprecedented. Nord Stream Natural Gas Pipeline Company is now unable to estimate when the gas delivery infrastructure will be restored.

. Data tracking

(I) Funding side

(II) Industry data

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. Financial market overview

In the week, in terms of commodity futures, the prices of major commodity futures rose and fell. Among them, lead prices rose by more than 4%; nickel fell by more than 8%. In terms of global stock markets, both Chinese and European and American stock markets closed down, with the Dow Jones Index falling the highest, reaching 2.92%. In the foreign exchange market, the US dollar index closed at 112.22, down 0.72%.

. Next week's key data

(I) The United States will release the September non-agricultural employment report

Time: Friday (10/7)

Comments: Market expectations increase by 275,000, lower than 315,000 in August. The September non-farm report will lay the foundation for the direction of the Federal Reserve's monetary policy in November to a certain extent. If it is significantly lower than market expectations, the market's expectations for the Federal Reserve's sharp interest rate hike of 75 basis points in November will heat up, and the US dollar is expected to strengthen; on the contrary, if the data is significantly improved, the US dollar will face selling pressure.

(II) A list of key data next week

(China Steel Network)