htmlOn the afternoon of August 22, a Huawei internal forum launched an article about "The entire company's business policy should shift from pursuing scale to pursuing profit and cash flow."
The article believes that the global economy will face recession and decline in consumption capacity. Huawei should shift from pursuing scale to pursuing profits and cash flow to ensure that the crisis in the next three years is overcome. Take survival as the main program, and marginal businesses will shrink and close all over the board, and pass the cold to everyone.
For the steel industry, "surviving" is also a realistic problem facing steel companies and steel traders. After a significant production cut, the steel market has temporarily survived the crisis, but it is still not a time to be optimistic. In the upcoming traditional "Golden September" peak season, can demand be released as scheduled to boost the market?
Looking back at the past June and July, the price increase of raw fuel in the upstream of the steel industry and the expectations of terminal demand failed. Under the double squeeze, many steel companies fell into the quagmire of losses. The severe situation has triggered many steel companies and related industry insiders to speak out.
More than a month later, the steel industry's production cuts were obvious. After the entire industry adjusted violently, it returned to a relatively balanced trend, and the main steel materials also returned to a near the profit and loss line. But this balance does not mean that the crisis is gone.
In mid-to-late August, as the traditional "Golden September" demand peak season approached, the steel market was blocked again after a slight rebound, highlighting that the overall supply and demand situation of the entire industry is still showing a weak situation. Industry insiders pointed out that the current difficulties faced by the steel industry are global, and the industry should be prepared to be subject to continuous impact.
Confidence is generally insufficient
html In mid-to-late August, approaching the traditional "Golden September" peak demand season, the steel market was blocked again after a slight rebound, highlighting that the overall supply and demand situation of the entire industry is still showing a weak situation. Industry insiders pointed out that the current difficulties faced by the steel industry are global, and the industry should be prepared to be subject to continuous impact.
For this year's steel market, steel traders all summarized the word "difficult". The word "difficulty" not only expresses the difficulty in judging the market conditions, but also represents the difficulty in recycling and sales and operation. Zhengzhou steel trader Yu Deli joked, "This year may be the most difficult year for the steel market, but it may be the best year for the next 10 years." He said that the recent weak demand for steel has led to insufficient market confidence.
is approaching the end of August, and the traditional peak demand season of "Golden September and Silver October". After the "Golden Three Silver and Four Banks" love was in ruins in the first half of the year, how does the market view another upcoming traditional peak demand season?
During the market visit, steel traders are generally not optimistic about the "Golden September and Silver October". Regarding this year's steel market, steel traders shook their heads and summarized it with the word "difficult". "This year's steel industry is really too difficult, and there are too many uncertain factors affecting the market." Yu Deli said that at the beginning of this year, under the policy of stabilizing growth, the market was full of confidence, but a sudden outbreak of the epidemic caused a large-scale stagnation of transportation and logistics across the country. Even megacities such as Beijing, Shanghai and Shenzhen were shut down. It is conceivable how big the impact it will be.
Yu Deli said that after the domestic epidemic was basically under control, everyone began to be optimistic about the market in May. However, demand has never been effectively restored, the market mentality has become pessimistic, and steel prices have begun to continue to fall. By July, the cumulative decline in steel prices had exceeded 1,000 yuan, and some local spot investors could not stand it and began to sell goods. Yu Deli was also very worried at that time, but considering that the market was always low inventories, if the goods were sold at a low price, the demand in the future would be in no goods and had to get goods at a high price. Therefore, he resisted the pressure and did not sell goods. Fortunately, the market ushered in a rebound.
After entering August, the company's shipments were also getting better and worse due to the fluctuations in steel prices. Although the shipments improved compared with the first half of the year, they still did not reach the level of the same period last year.
From Li Hongli, manager of Beijing Shouyi United Metal Materials Market Co., Ltd., said that the throughput of the first-line warehouse in July was more than 120,000 tons, a significant decline compared with the same period last year. Since August, shipments have remained not very good, and inventory has been at a high level, twice as many as in previous years.
Li Hongli said that the arrival of in August was not very good. In more than half a month, the first-line warehouse Jingye Steel only arrived more than 10,000 tons. Moreover, the Northeast and Northwest resources are not available at present, so the current situation will continue to be maintained in the short term, and the overall situation is weak in both shipment and incoming.
Steel market rebound was blocked
html In July, the complex and severe domestic and international environment and the impact of frequent epidemics continued. The domestic market demand situation in steel is still lower than expected, steel production fell month-on-month, and steel prices continued to fall. Since August, steel prices have stopped falling and rose.
According to the monitoring of the Steel Association, at the end of July, China's Steel Price Index (CSPI) was 111.46 points, a month-on-month decrease of 11.06 points, a decrease of 9.03%, a month-on-month decrease of the third consecutive month; a year-on-month decrease of 42.02 points, a year-on-year decrease of 27.38%, a year-on-year decrease of the fourth consecutive month.
China Steel Price Index (CSPI) trend chart
As of the week ending August 19, the national comprehensive steel price was 4,359 yuan/ton, down 1.2% from the previous value, and the prices of major varieties were mainly fluctuating and falling. The blast furnace operating rate continued to rebound slightly, social inventory fell for nine consecutive weeks, inventory in building materials factories rose slightly after a week, and inventory in medium and thick plate factories rebounded slightly.
In the past two months, caution and waiting and watching have become the main sentiment of the entire market. As one of the important factors in judging the trend of the steel market, social inventory also indirectly reflects the state of market demand. June and July are the traditional off-seasons of the steel market. High temperatures and rainy weather significantly affect outdoor construction projects, which generally leads to a significant increase in steel inventory from June to August.
data shows that from late June to August 19, the social inventory of steel has experienced "nine consecutive declines". In June and July, data such as fixed asset investment, , real estate investment, and other data that are closely related to the steel industry all fell significantly, which is obviously not conducive to the recovery of steel demand. The decline in off-season inventory actually reflects the lack of market confidence.
In the first half of this year, the continued failure of steel market demand and the continued decline in steel prices have led to a pessimistic market mentality. In recent months, steel traders have been unable to withstand the pressure and began to dump goods and reduce warehouses. As steel traders significantly lowered their warehouses and terminal steel companies did not dare to stock up, coupled with the multiple factors of steel mill production cuts, social inventory continued to decline.
analysis points out that from the supply side, due to the lack of obvious rebound momentum for steel prices, the profit margin of finished steel is compressed, and the enthusiasm of steel mills to resume production has weakened again. On the demand side, due to the hindered rebound of steel prices, there is no obvious sign of terminal demand increasing, and the confidence of market merchants is also insufficient, and the wait-and-see atmosphere is strong.
At present, the steel market has basically overcome the crisis, but it has not reached a very optimistic level. In addition to the outstanding performance of infrastructure data in July, major data such as real estate investment, sales, new construction and construction weakened month-on-month, with mixed year-on-year declines. The overall weakening of real estate has also caused a certain drag on the demand for steel and other commodities; however, the construction of infrastructure projects has accelerated, and the demand for steel and other commodities is also increasing.
Analysts said that it is expected that the gold September and silver October will be cashed out this year, but it should not be overestimated. After all, it is still in the global interest rate hike cycle, and commodity is under pressure to a certain extent; recently, the country has frequent high temperatures and rainy weather, especially in the southwest region, which is relatively common, which will undoubtedly have a direct impact on terminal construction.
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