Lead: Since the second quarter, with the arrival of a number of national key projects and local infrastructure projects, the construction steel market, which was slightly quiet before, seems to have been given a shot in the arm. However, faced with the interweaving of macro-policy and micro-reality, whether this "story" of demand recovery driven by infrastructure is a flash in the pan or a sustainable trend has become the focus of general concern in the industry.
1.Policy-driven, "steel demand" engine rekindled
"Recently, there have been a lot of reminders on the construction site, mainly asking when φ 12 thread and HPB300 wire will arrive." The sales manager of a steel trading company in East China gave such feedback. His feelings are not unique. According to public data, from the end of the first quarter to now, the approval and commencement of major projects including transportation, water conservancy and urban renewal have been significantly accelerated, which has brought substantial order support to the construction steel market.
The warming of market sentiment is directly reflected in the speed of "destocking". According to the survey data of this website, as of the time of publication, the social stocks of rebar in major cities in China have been declining for four consecutive weeks, and the average weekly decline has remained at around 3%. A senior market analyst pointed out: "The main driving force of this round of inventory digestion is the rigid demand of infrastructure projects. Especially in the railway and highway projects in the central and western regions, the consumption of rebar and wire rod is very large. "
2.Behind the recovery: hidden worries and challenges coexist
Despite the good news from the demand side, all parties in the market remain somewhat cautious in optimism. Its core doubts mainly focus on the following aspects:
- The availability of funds is the "life gate". It is a good thing to start the project, but we are more concerned about whether the subsequent project funds and materials can be paid in time. If the capital chain is as tight as last year, the sustainability of demand will be a big question mark. The project has started, but our procurement is still' small steps and quick running', and we dare not prepare goods in large quantities, for fear that the follow-up funds will not keep up. This reflects the core characteristics of current demand: "real" but "not prosperous", that is, there is real consumption, but it is difficult to form explosive growth.
- The phenomenon of real estate "dragging its feet" is still obvious. In sharp contrast to the fiery infrastructure, the newly started area of real estate is still in the year-on-year decline range. It is generally believed in the industry that the growth of infrastructure demand may only partially offset the weakness in the real estate sector, and it is difficult to completely replicate the prosperity brought by the "two carriages" in the past.
- Elasticity of supply end. At present, the utilization rate of rebar capacity in major steel mills has rebounded to a relatively high level. If steel mills continue to increase the volume driven by profits, it may quickly fill the gap caused by demand, thus restraining the further upward space of prices.
3.Outlook for the market outlook: cautiously optimistic, the key is to look at "capital flow"
On the whole, the current recovery of the construction steel market has a solid project foundation and strong demand support in the short term. However, the "endurance" of this round of market will directly depend on the availability and speed of project funds.
Some organizations predict that in the next one or two quarters, the rebar and wire market will maintain the pattern of "strong supply and demand, strong price fluctuation". The top of the price is determined not only by the cost, but also by the real liquidity of funds downstream.
