According to statistics, the average daily output of crude steel in the middle of January 2012 was 1,668,600 tons, down 22,000 tons, or 1.3%.
As can be seen from the data, the output in mid-January not only remained low (continuously below the average daily average of 1.7 million tons), but also had a significant decline (reduced by 22,000 tons), slightly better than expected. This shows that the large-scale production reduction of domestic steel mills is still continuing, and the supply-side benefits are once again strengthened. Continued decline in output means that the positive role of the supply side will continue to strengthen, and taking into account factors such as expected improvement, a slight rebound in demand, firm costs, and loose capital easing, we believe that steel prices may still recover in February.
The change in output is basically in line with the blast furnace start-up and steel mill maintenance in Tangshan. On January 19th, the operating rate of Tangshan blast furnace dropped by 1%, and the volume of blast furnace maintenance increased by 41.2%. In terms of overhaul, the total maintenance volume tracked in January was 708,000 tons, a slight increase of 35,000 tons (5.2%). Among them, the number of inspections decreased slightly in January, which was inconsistent with the decline in output. The reason may be that the statistical sample is incomplete or the steel association data is once again underestimated. We prefer the first one, but in any case, this does not affect the low output. Trend.
As the production cuts continue, the positive role of the supply side becomes more and more prominent. The most obvious impact is still to reduce the pressure on the industrial chain inventory. We believe that the social inventory growth during the Spring Festival is lower than expected, which is closely related to the contraction of the supply side. In the later period, both supply and inventory will bring obvious support to the steel market.
In addition to the positive supply side, we believe that the positive support for the rebound in steel prices in February includes: First, the post-holiday market mentality has improved, second, the traders' demand for replenishment stocks may be released, and third, exports may widen with domestic and international spreads. Increase, fourth, the cost will continue to be strong, and fifth, the capital will at least not constitute a significant negative.
Concerned about surprises
Label: steel price, good steel production, steel market, production change
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