In the coming April, the risk of high inventories in the steel industry will increase.
Affected by the recent epidemic, the global financial market has been turbulent, and most bulk metal commodities cannot escape the bad luck, but rebar can stand out and be ridiculed by the market as "rebar gold".
On March 18, a person from a steel mill said that the rebar's strength was nothing more than the expected effect, and everyone had good expectations for the market outlook.
According to his analysis , after the domestic epidemic was effectively controlled, except for some provinces such as Hubei, the resumption rate in other parts of the country is over 90%. Investors have expectations for stable growth and stable employment, and the country will definitely make great efforts in large infrastructure, and even real estate regulation will be loosened; national policies have continued to stimulate, and a series of favorable factors such as fiscal and monetary policies, crash duration, and consumption release have added together, which is expected to promote an economic rebound.
The sentiment of market participants is that downstream is recovering, and future demand is no problem. They have such optimistic expectations, turning a blind eye to the huge inventory, and seem to have enough confidence to support the strong rebar and contango.
But the recovery of the steel industry has not come. The current difficulties are more concentrated on capital, including high cost pressure on raw materials such as iron ore, and comprehensive cost pressure.
The digestion of actual inventory has become the biggest problem that steel companies and traders have to face. Excessive inventory of finished products also means that the proportion of occupied funds is too large, and its funding pressure is also increasing. Especially the end of March, the centralized settlement period of winter storage is approaching.
The problems encountered by the iron and steel industry are comprehensive, and they are the difficulties caused by the contradictions and problems in various aspects. First, the contradiction between supply and demand has intensified further, and second, funding issues.