On the supply side, before 202 1, we investigated 9 1 independent EAF steel mills nationwide. During the Spring Festival this year, 82 independent EAF factories chose to stop production and have a holiday, and 9 factories received goods as usual without a holiday. The number of entrepreneurs receiving goods normally accounts for 10% of the total sample. In contrast, there were 76 independent electric furnace steel mills surveyed before 2020, 72 independent electric furnace steel mills that chose to stop production and have a holiday during the Spring Festival, and 4 manufacturers that received goods as usual without a holiday. The number of entrepreneurs who receive goods normally accounts for 5% of the total sample. The survey results show that the proportion of independent electric furnaces that choose normal production in winter has increased under the background that the government encourages local Chinese New Year this year and the profit of electric furnaces is relatively high.
In terms of downtime, among the 82 enterprises that have decided to stop production and have a holiday, 39 choose 1 month holiday, of which about 32 choose 5438+1month holiday at the end of June; Of the 82 enterprises, 3 1 stopped production, and 1 1 stopped production too early or too late due to various factors such as maintenance.
Compared with last year's shutdown time, among the electric furnace factories that decided to have a holiday years ago, last year's holiday time for electric furnaces was mostly around 65438+ 10/and last year's Spring Festival time was 65438+ 10/25, with an interval of 13 days. The holiday time this year is mostly around 65438+1October 3 1, and the Spring Festival this year is February 12, with an interval of 1 1 day. This year's shutdown time is slightly later than last year.
Because the epidemic situation is still uncertain, the specific time for most of the steel mills surveyed to return to work has not yet been determined, which will also lead to greater uncertainty in judging the supply situation of short-process steel mills after the year.
In view of the current market situation, we conducted a survey on the following steel mills. The survey results show that the winter storage of steel mills in East China and South China is good, while the progress of winter storage in North China, Northeast China and Northwest China is slow.
North China Steel Factory A: It is difficult to collect scrap steel now, and the scrap steel in the factory is in stock for less than a week. Although the logistics congestion has gradually eased with the relief of the epidemic, it is still hard to find a car, and the car freight has increased by10-40 yuan. Vehicles entering the factory now must issue an accounting test report within three days, wear masks when entering the factory, and take protective measures; Scrap steel resources around the factory are relatively tight, and the goods are not easy to collect.
North China Steel Works B: Since the road was closed on June 8, 65438, the delivery of finished products in the factory has basically stopped. At present, the supply of raw materials is relatively tight. Although various factories are actively looking for goods to purchase, it is difficult to increase inventory. Holidays in previous years will be arranged a few days before the Chinese New Year. Now, due to the epidemic situation and low profits, we may consider taking a holiday in advance, but we will not stop scrapping for the time being.
Central China Steel Plant C: Because of the epidemic, there is a shortage of trucks in neighboring provinces, which leads to the freight rate doubling from 40-50 yuan to 80- 100 yuan, and then drivers are hard to find. At present, the receiving strategy of the factory is to meet the daily consumption as much as possible and maintain the current inventory level. At present, the inventory in the factory is only two or three days. According to the production situation, we will have a holiday when the materials are used up.
South China Steel Factory D: At present, the local epidemic situation is well controlled, and the market is mainly affected by migrant workers and motorcade drivers inside and outside the province. Due to the differences in epidemic control in different places, these people all show signs of returning home early, and the whole province is facing the situation that the circulation of scrap steel sources is declining and it is hard to get a ticket for transportation vehicles. However, the winter storage in the factory has been completed well this year. At present, the winter storage inventory is basically ready, which will not have much impact on production.
E: East China Steel Works: At present, there is a policy in the province that employees in the province can apply for government financial subsidies if the proportion of employees who stay in the factory and do not go home reaches a certain level. This year's profit is good, so they don't consider taking a holiday and don't stop production during the Spring Festival. Because the epidemic situation in the province is well controlled, there is basically no big impact at present, and there is not much scrap steel in the factory, so they practice as much steel as they collect every day.
F: Northwest Steel Works: At present, the epidemic situation has a great impact on scrap procurement. At present, cars in the province can't get out, and logistics is seriously blocked. We can only find ways to collect waste products in this province, because the price of finished products is low, and the arrival of waste products in the factory is not very good at present. Maintenance may be arranged during the Spring Festival, affecting the output by about 10- 15%.
As for the scrap base, after our investigation, it has the following characteristics (1). General base holiday time coincides with the holiday rhythm of steel mills. Basically, if steel mills stop production or reduce production, they will also choose to close down. (2) If there is additional demand for scrap steel from long-process or short-process steel mills that do not have holidays in some areas, even during the Chinese New Year, the contract households of steel mills will transfer goods from major bases or pick up goods from their own stocks prepared for steel mills in advance to meet the demand of steel mills, of course, the price will definitely be higher. (3) Scrap bases with more local workers will generally have a holiday later than those operated by foreigners, because most foreigners will still choose to go home, and locals can operate here for a period of time because they spend the New Year.
East China Base A: There is no holiday at present. It is estimated that the end of the month will come soon. The profit of electric furnace factory is understandable, so the demand of steel mills is still relatively firm, but now the price is too high, and I dare not store too much goods on the construction site. No one can tell what the market will be like after the year. At present, it is still actively shipping.
East China Base B: At present, there is a holiday, mainly because we and the workers on the construction site are foreigners. Now I have to be isolated at home when I go back to my hometown, and it's not bad to go back to isolation early. The workers have worked hard for a year, and this year is nothing more than that. I don't have much thoughts about next year for the time being. After last year's plunge, there is basically no inventory on the ground now, and the inventory is lower than in previous years.
In view of the subsequent influence of the policy on the steel market, there are some differences in the judgment of the balance between supply and demand in the futures market after the year.
Multi-head-(1) Demand side: Migrant workers in some areas will not go home this year, and some construction sites and production sides may have certain demand resilience compared with previous years. Judging from the apparent consumption intensity of steel, the current consumption intensity is still higher than the historical average level in the same period. (2) Supply side: The inventory of raw materials in steel mills is low, and some raw materials are in short supply, which will affect the production of steel mills and limit the accumulation range of steel products during festivals.
Bears-(1) Demand side: Winter itself is the low season of demand, not only because of going home for the New Year, but also because of the influence of climate and weather. Policies can reduce the number of people going home for the New Year, but they can't change the weather. (2) Supply side: At present, the supply of raw materials is in short supply, which means that the output of supply side will increase after the year and it will face supply pressure.
At present, these two views are representative, and it is not yet possible to falsify each other's views. The recent trend of the futures market is not obvious, and it begins to fluctuate greatly at a high level.
The biggest difference between the price operation of finished products this year and previous years is that this year's finished products are cost pricing to some extent (the inventory of finished products is higher than previous years, while the inventory of main raw materials is lower than previous years). Considering the start-stop cost of equipment, the long-process blast furnace steel plant will not have a holiday in the Spring Festival last year. Generally speaking, they often spend the off-season by increasing maintenance, while short-process electric furnace steel mills have shown obvious seasonal characteristics in the past, and most electric furnace factories often choose to have a holiday during the Spring Festival. However, there are two big differences between this year and previous years. As mentioned above, on the one hand, the government encourages celebrating the New Year on the spot.
On the other hand, the sharp rise in iron ore and coke prices has seriously eroded the profits of long-process blast furnace steel mills. According to the calculation of thread profit of long and short process steel mills, the profit of short process electric furnace plant has been better than that of long process blast furnace since June+February, 5438. Behind the profit of short-process steel mills is better than that of long-process steel mills, it is the pricing power of iron. Regarding iron ore, although relevant institutions have been emphasizing the importance of pricing power, we have to admit that China's voice in iron ore pricing is still too small in the face of the iron ore that has risen to 170 USD.
But relatively speaking, the pricing power of scrap steel is hard leverage. It can be found that the recent arrival of scrap steel in 109 steel plant is better than that in the rising period of scrap steel. On the other hand, it is objectively proved that steel mills have a price impact on the short-term pricing of scrap steel, and of course the long-term pricing of scrap steel will return to the objective law of supply and demand pricing. From the market expectation, some analysts believe that the supply and demand of iron ore and coke will continue to be in a tight balance in the first half of next year, so the pattern that short-process profits are better than long-process profits will continue.
To sum up, the number of short-process electric furnace enterprises that choose not to stop production and harvest during the Spring Festival this year has increased compared with last year under the pattern that the government encourages local Chinese New Year and the profit of electric furnaces is relatively high. However, due to the epidemic situation, there is still great uncertainty about the resumption time of steel mills in the later period, and the Fu Bao Scrap Team will continue to follow the relevant market changes in the later period.
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