Since entering September, the steel market has staged a small wave of rally, which lasted for about two weeks. Taking the Shanghai market as an example, the spot price of rebar rose from 3,600 yuan/ton to 3,760 yuan/ton, up by 160 yuan/ton. In the same period, the Beijing market only rebounded by 100 yuan/ton. This reflects that the market is still driven by demand expectations, and psychological factors have played a certain role. With the release of economic data in August, macroeconomic indicators fell, steel production began to increase, social inventory fell sharply, steel mills increased inventories, demand expectations fell, and the rebar market showed a correction. It is expected that the steel market will be difficult in October.

The market should not be overly concerned with the so-called "Golden September and Silver October"

Looking back over the past three years, the steel market has not seen a big market in September and October. This is affected by factors such as holidays, economy, industry and policy. From September, rebar has risen by RMB 80/ton to RMB 100/ton in early September 2017, and dropped by RMB 300/ton in mid-to-late September. In September 2018, it has been oscillating at a high level of RMB 100/ton. From the 4,350 yuan / ton at the beginning of September to 4,360 yuan / ton at the end of September, the range of change is limited. From October, the steel market changes are also limited. Still taking rebar as an example, the range of rebar prices in October over the past three years is: 2400 yuan / ton ~ 2540 yuan / ton in October 2016, 3850 yuan / ton ~ 4050 yuan / ton in October 2017, 2018 In October, it was 4,400 yuan / ton ~ 4,500 yuan / ton. The real big market is happening outside of September and October. For example, in November 2016, rebar prices rose by 1,300 yuan/ton. In November 2017, rebar prices rose by about 700 yuan/ton. In November 2018, rebar prices fluctuated at a high level and fell by more than 800 yuan/ton after only one week. . This shows that the rise of the steel market and the "Golden September and Silver 10" have no clear positive relationship, "Golden September and Silver 10" is only a concept of time.

Many market participants have inertial thinking, and believe that the steel market will definitely rise in the peak season of “Golden September and Silver 10”. In fact, how the market trend can not only look at demand, not rely on the so-called demand season.

In 2017 and 2018, the market was driven mainly by the supply side. In August 2017, steel inventories hit a new low in the same year. In the same period, the profit of rebar of steel in Tangshan Steel Plant of Hebei Province was as high as 900 yuan/ton to 1,000 yuan/ton. The steel production growth was limited, the supply and demand in the steel market was basically stable, and with the influence of fiscal policy and environmental protection policy, the market situation generally rose in September and October. In the same period of 2018, environmental protection and production restrictions and consolidation of the “strip steel” results were carried out at the same time, the release of steel production capacity was suppressed. In July 2018, the average daily crude steel output and daily average steel output both fell, and the steel market remained volatile. situation. In 2019, the supply-side structural reforms have disappeared from the production capacity dividend. The market has evolved from a weak supply-demand relationship to a weak balance between supply and demand. Steel production has grown rapidly under high-profit stimulation, and annual crude steel output has reached 1 billion tons. Scale, the balance of oversupply is gradually tilting, and it is expected that the market will no longer have a big market.

In October this year, the steel market is difficult to do.

If the market in September revolves around a recovery in demand, then the market will return to the supply and demand game in October. In terms of demand, terminal demand generally declined in September. First, the newly started area of real estate fell for two consecutive months, and the cumulative growth rate of new construction started to fall three months later, confirming the strict characteristics of real estate regulation in the second half of this year. Second, although the manufacturing and auto industries have improved, they are still weak. In the first eight months of this year, China’s orders for new ships have fallen sharply year-on-year. In August, manufacturing investment experienced negative growth for the first time in several years. Third, although the infrastructure has improved, the growth rate is limited. It is relatively difficult to rely on infrastructure to hedge the decline in demand.

In addition, from the perspective of output and social stocks, the inventory decline has narrowed significantly. The steel market in the northern region has been affected by the shutdown and the inventory has increased. The output has been reduced since last week (September 16 to September 20). As National Day approaches, production cuts will be a “double-edged sword” that affects both supply and demand. The author predicts that the steel market will remain in the process of strong supply and demand in October, and the market is difficult to proceed.