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In 90 days, Chinese steel experienced a rare ups and downs in recent years.
This round of futures skyrocketing, so that the steel companies after the worst winter of last year, the collective turmoil - spot steel prices followed by rising, the blast furnace resumed production. In just over a month, the average daily output of Chinese steel reached a record high of 96.676 million tons in April. According to such monthly production, this year's steel output is likely to surpass 2015 in one fell swoop.
The price of the waves has caused the steel industry, which has a serious overcapacity, to come one after another. Not only will the situation of de-capacity become more severe, but the steel producers whose reaction speed is always slower than the price will become confused in the market. Not only will the cost become uncontrollable, but the output will be unplanned.
Wang Qilin, a steel futures analyst at Sinosteel, told the Economic Observer that this round of soaring and plunging, under the premise of mismatch between supply and demand at the beginning of the year, the power of futures speculation played a leading role. "After entering June, the two forces of long and short have started the game again." Wang Yulin told the Economic Observer.
Steel enterprise's heart
It has been more than 20 days since the March 7th pull-up, and rebar futures continue to climb in the sway. Whether it is the steel futures market or the spot market, the tense atmosphere has not retreated. By April 21, the rebar futures price finally reached the peak of the year in a rush.
In order to lock in future price risks in advance, as the largest private steel mill in Tangshan, Guofeng Steel has been buying hedging in steel futures and even raw material futures in recent years.
However, companies like Guofeng Iron and Steel, which know how to use futures to avoid price risks, are still a minority in China's steel industry. More production companies are passive in the face of this year's rather emotional market.
From the beginning of March to the beginning of June, in the three months, the Chinese steel market experienced a round of skyrocketing crashes that they did not expect.
On March 7th, when the night market opened, the main contract of rebar futures was strong and the daily limit rose to 8%. Since then, the national steel market has been fully red, and prices have risen several times a day.
Spot prices are almost on the rise. On March 14, WISCO issued the April steel price policy: the price of hot-rolled products was raised by 260 yuan/ton, and the price of cold-rolled coils was raised by 280 yuan/ton. The price adjustment policy has been continuation since WISCO since February 2016. In the third month, the price of hot and cold varieties will be raised. A month later, WISCO announced another price increase.
However, steel prices quickly swooped.
On April 29, the steel price restarted the downtrend channel. By June 1, the rebar futures price had fallen below 2000 points, down 28% from the highest point.
Between one liter and one drop, this round of steel price shocks reached 65%.
Iron and steel companies that produce a lot of slow prices are very scared of this situation. “The impact of price fluctuations on production is too great.†Ma Li, deputy general manager of Lange Steel Information Division, told the Economic Observer that “intra-supply and external marketing, the impact of prices on steel companies is comprehensive. The market is stable. The next enterprise will have more control over production. If the steel price fluctuates greatly, not only will the cost become uncontrollable, but the output will be unplanned."
Different from Guofeng Steel's free operation in the futures market, state-owned enterprises are strictly controlled by the system in the futures market. Zeng Jiesheng, director of the Shanghai Steel Association (45.820, 0.00, 0.00%) Research Center, told the Economic Observer that “currently, there are more private steel companies participating in the futures market, such as Shagang Group doing some hedging, etc. in domestic steel enterprises. The reputation is also very big."
Wang Yulin told the Economic Observer that in the steel futures market, the participation of spot companies is relatively low, firstly in the low proportion of corporate participation, and in addition, the transaction volume is relatively small. For hedging, hedging The amount is still not enough. “With too little participation in spot companies, the power of investment is undoubtedly dominated in the futures market,†she said. “The awareness and ability of Chinese steel companies to use financial instruments for price risk aversion is still limited,†said Wang Yulin.
Rare behind the rise and fall
"After entering June, as steel prices entered the break-even point, the two forces that were long and short were starting to play again." Wang Yulin analyzed.
The turmoil in the spot market is even too much for futures.
According to the data of China United Steel, the price of the third-grade rebar in Shanghai is only 1930 yuan/ton on March 1, and it is 2430 yuan/ton on March 8. In the second half of the month, the price of steel has been all the way. The shock rose, reaching 2,900 yuan / ton on April 21, up nearly 1,000 yuan / ton, an increase of 50%. Starting from April 29th, the spot opened the downtrend channel and fell to 2000 points on June 2, which was 31% lower than the highest point. Between one liter and one drop, the amplitude reaches 81%.
This is a rare ups and downs in the past few years. "In our view. This round of skyrocketing actually has a sequence of evolution." Wang Yulin analyzed that the skyrocketing was carried out in two phases. The supply at the beginning of the first phase was insufficient, and the demand was strong beyond the market expectation, and there was a mismatch between supply and demand. The futures market generated good expectations. Then in the second stage, that is, near 2700 points until April 22, this period of time accompanied the large amount of funds from the steel traders into the spot market, and the reselling was more active. At this time, the spot and futures formed. Pushing each other. "If the steel mills have resumed production when the price has just risen at the beginning of the year, then the attitude of the steel mills is hesitant. The reason is that the situation was too severe, the market is not optimistic, and the profits are not high enough. Moreover, the funds are also It was not in place. But after a month of increase, these conditions were met. The steel mills finally got their horsepower, and the average output in April hit a record high. The supply and demand pattern changed at this time, and the price returned to profit and loss by the end of May. Balanced state."
Wang Yanlin's analysis coincides with Li Yanjie, director of the Futures Research Center of the Metallurgical Industry Economic Development Research Center. “Actually, from the end of last year to the beginning of this year, the destocking of the entire steel industry chain has become extremely extreme.†Li Yanjie said, “At that time, everyone was very pessimistic. On the one hand, the company was desperately going to capacity, and on the one hand shut down the production capacity. There are also many, macroeconomic policies at the beginning of the year have a certain stimulating effect on demand, and at the same time the traditional demand peak season, the fundamentals of the market have already supported the price increase, and it is inevitable that the market expects changes at this time." The wave rises, the spot price follows the futures, and the futures play a very obvious price discovery role." Wang Yulin said.
However, futures on the spot price, or a certain degree of price guidance, play different roles in different time periods. Wang Yulin told the Economic Observer that it depends on whether there is any fund speculation in the current futures market, as well as supply and demand. In other words, the main influencing factors of steel prices are from supply and demand or from financial markets. The influence of the two phases is different. “Futures products themselves have both financial attributes and commodity attributes. Financial attributes, the Fed does not raise interest rates, and the domestic monetary policy. If these factors are obvious in the short term, the futures price will react first than the spot price. For a certain period of time, if it is determined by the supply and demand side, then the spot price will react first, but even in this case, the power of spot funds may be lost to the speculation power of futures, and the reaction of futures prices will Anti-over the spot."
March 2009 rebar futures were officially launched. According to the past analysis of Sinosteel Futures, when every steel price has an inflection point (up or down), it is basically the futures leading spot. "Of course, there will be a situation where the spot price inflection point is earlier than the futures, but the overall situation is relatively small." Wang Yulin introduced.
"Another background worthy of attention is that this year's stock market is not good. Commodities are easy to be noticed. The only black metal in bulk commodities has no outer disk. Unlike other commodities, the outer disk can play a role in price checks and balances. Of course, Finally, don't forget that at the beginning of the year, it was at an unprecedented value, "Wang Yulin said.
In addition, Wang Yulin said that the main contract delivery time for black raw materials futures is January, May and September, and the delivery time is one, five and ten months, all of which are discontinuous, because the middle time cannot be delivered, but also exists. The possibility of being controlled by speculative forces. "In theory, the more subjects involved, the more abundant, the better the role of futures product price discovery." Li Yanjie said, "Steel enterprises can effectively use futures tools for hedging, which will help enterprises cope with Market risk can also improve the ability of enterprises to operate, and also help futures prices to better converge on the spot, more effectively reflect the fundamentals of the market, and futures as a hedging instrument will be more useful, which is a virtuous circle. â€
De-capacity
Some people have summarized the steel market in 2015: steel prices plummeted, production and sales fell first, losses were more than half, and costs fell back to the rescuer.
According to the statistics of China Steel Association, the average daily crude steel output of steel association members in the second half of 2015 has been declining in the turbulence, production and sales are two lags, the traditional Jinjiuyin 10 and winter storage did not appear in this year. After entering mid-October, the decline in output was particularly noticeable. By the end of 2015, it reached the lowest point in the year, with an average daily output of only 1.5 million tons, and the peak of Nissan this year was around 1.8 million tons.
Considering that the size of the member units included in the statistics is relatively large, those smaller steel mills are not included in the statistics, and this part of the steel mills is more likely to “see the machineâ€, the production will be more active, and the output of the entire steel industry will decline more.
However, after a very harsh winter, the unexpected surge in the spring of 2016 caused the steel companies to collectively stir up. A large-scale resumption of production that has been long-lost has been generated.
Since March, monitoring of major data platforms has shown that the number of blast furnace re-ignitions is increasing, and there are some revived zombie companies. In just over a month, the average daily output of China's steel industry recovered strongly, eventually reaching a record high in April.
According to the statistics of China United Steel, the cumulative output of domestic steel in the first four months of this year was 369 million tons, an increase of seven percentage points over the same period last year. According to this situation, steel production in 2016 is likely to surpass the past year. “After the steel price rises, the output of the enterprise is not willing to be suppressed any more, unless the price is low enough to be completely intolerable. It can be said that the steel market is always in a state of constant game between the supply and demand. Now the price has once again sharply adjusted back. However, due to inertia, the production of steel enterprises is difficult to respond quickly to this rifle.†Guofeng Steel’s market researcher said at the meeting.
Sensitive and volatile price fluctuations have become the most problematic steel companies. Industry observers told the Economic Observer that for the spot of commodities, the market needs stability, especially the stable price system, which is the most important prerequisite for production and operation. However, for bulk commodities, the lag of the supply side relative to the demand side is obvious, and steel is no exception. For this reason, the turmoil has caused steel companies to face various uncertainties in production and operation.
Steel production lost its direction in such uncertainty, and the industry's de-capacity situation has once again become severe, and the poor profitability of the company has once again become unpredictable.
On June 8, 2016, 2077 yuan / ton, this is the final price of the Shanghai Futures Exchange rebar 1610. As Wang Yulin said, the strength of the Chinese steel market to go short and long is still in the game. What kind of situation will be in the second half of the year, no one can tell.
Abstract The rebar futures on March 7 opened at the daily limit, opening the first round of rapid rise in steel prices in 2016. After one and a half months, the futures growth rate reached a staggering 37%. However, immediately, a surprise dive quickly pulled the steel price hard, until June 1...
The rebar futures on March 7 opened at the daily limit, opening the first round of rapid rise in steel prices in 2016. After one and a half months, the futures growth rate reached a staggering 37%. However, shortly afterwards, a surprise dive quickly pulled the steel price hard. By June 1, when the futures price was higher, it fell 28% and returned to the breakeven point.