September building materials market is expected to improve

The main factors contributing to the good performance of construction materials in September are: the supply and demand fundamentals of building materials still have a good driving force. The first is the pressure of inventory. As of August 21, the statistical social inventory of thread and wire rods was 4,947,700 tons and 758,600 tons respectively, which was not only significantly lower than the 5,606,800 tons and 1.4012 million tons in the same period of last year, but also maintained a relatively large weekly cycle ratio since the beginning of this year. Even lower.

The current thread stocks are close to the level before the Spring Festival, and wire stocks are the lowest level in recent years. In addition, the inventory of 139 steel mills we surveyed totaled 3.648 million tons, which is close to the lowest level in a year. The lighter pressure on inventory determines that even if the price has a downside, it is limited. Second, the increase in supply is also limited. In the 139 steel mills surveyed, the actual weekly yield of the rebar production line on August 21st was 72.6%. Although it increased slightly for several consecutive weeks, it still fell 0.71% year-on-year; the production rate of the high-wire coil production line Zhouda was 66.1. %, also a slight increase in a row, but a year-on-year decrease of 0.27%. Coupled with the limited production in early September in and around Beijing, it is bound to reduce supply pressure in September.

Even if the price increases in the later period, the steel mills will not obviously resume production. According to the survey, the loss of 163 steel mills nationwide has reached 65%, and due to the sustained large losses in the previous period, the possibility of expanding production in the future will continue to increase. Not realistic. Therefore, the supply of building materials throughout September may remain at the level of August. In addition, the demand for building materials in September is still expected to maintain August levels or even slightly increase. The main reason is that September is the traditional peak season for consumption, especially the best construction season in the world in one year. In addition to the steady growth of the country, it depends on investment. Investment depends only on infrastructure. Therefore, the demand for construction materials is expected to reach in September. A slight increase.

In addition, the central bank intensified efforts to supplement the economic pressure of liquidity mitigation entities. In addition to launching reverse repurchasing (565 billion yuan), medium-term borrowing facilities (110 billion yuan), and SLO (1400 billion yuan) to inject liquidity into the market, it also has a "three-pronged approach": big move, lower interest rate, and targeted downward adjustment. Will release 600 billion liquidity. The relief of liquidity pressure is expected to promote new projects and expand production and demand. As a whole, the supply and demand fundamentals of construction materials are expected to improve in September.

In short, under the influence of global financial market and commodity price decline in September, despite the downward pressure, the steel market will continue to maintain a long-term strong and weak differentiation under the influence of the “parade of military parade” and steady growth policies.