Recently, Shaanxi, Henan, Tianjin and other places epidemic re-emerged, the production and operation of local steel enterprises have been affected to some extent. In my opinion, the impact of this scattered, regional epidemic on the steel market is mainly reflected in the following aspects:.
First, the release of resources is limited. Affected by the epidemic prevention and control policy, the normal production of steel enterprises in the epidemic area was disturbed, and the release of resources was restricted to varying degrees. For example, 11 steel enterprises in the Anyang area of Henan Province have entered a state of shutdown and closure, and the largest Ansteel has only opened a blast furnace. Affected by this, the regional market supply of resources to reduce, or will lead to the formation of regional supply and demand mismatch pattern.
Second, logistics costs rise. According to my understanding, due to the epidemic logistics control reasons, Henan, Tianjin and other places of logistics and transport drivers must hold the relevant nucleic acid test report to access, resulting in a significant restriction on the flow of steel across the region. Due to the lack of vehicle resources, steel logistics costs generally rose 25% to 40%, which to a certain extent formed a supporting role for steel prices. Only, due to the current market in the off-season demand, the market transaction is cold, the conduction effect of logistics costs or will be reflected only after the Spring Festival.
Overall, for the steel market before the Spring Festival, the impact of the epidemic on the market stays more at the emotional level, in the supply contraction is expected, the futures market capital bearish sentiment gradually thick, but the actual volume of limited spot market, the previous phase of the epidemic on the impact of steel prices actually effective, the specific effect of the release may be delayed until after the Spring Festival.
If the epidemic prevention and control situation is still severe after the Spring Festival, the steel enterprises in the epidemic area can not quickly resume production, then the market supply contraction is expected to further strengthen, do not rule out the futures market capital before the industrial reality of misaligned speculation, and then pull the spot resonance upward, the steel market has after the Spring Festival ushered in the "open door" may. Only, in the "supply and demand double weak" pattern, the spot market can continue to follow the rise of a great uncertainty, do not rule out the possibility of steel prices due to high transaction blocked and fall.
If the regional epidemic can be quickly and effectively controlled, then the supply-side resource release after the Spring Festival will gradually return to normal, at the same time, the downstream project construction progress will be accelerated, the market will enter the supply and demand fundamentals of the game. Considering that the market in February in the traditional demand off-season, the supply side will probably dominate the market trend, do not rule out the strong demand is expected to drive, steel prices have a phase of pulling up the possibility.
Overall, the impact of this round of national multi-point outbreak on the steel market is mainly manifested in the emotional level, will not become the main driving logic of the market, but also did not form a direct impact on steel price fluctuations. In addition, the current level of steel social inventory is significantly lower than the same period last year, the market inventory pressure is not large. With the introduction of good macro policies, the economy stabilization trend is obvious, which will to some extent hedge the negative impact of the epidemic on the demand side, which is conducive to the smooth operation of steel prices. I believe that the steel market after the Spring Festival can not be ruled out the possibility of inertia, the specific space and duration of the rise will depend on whether the demand is expected to be effectively realized.