A "Golden Thread" Capital Ripple

For a while, such as "why is thread so hard?" One reason for the independent market is that the main players do not understand English, so they are not affected by the overseas market. " The passages often appear.

In the past week, thread steel is undoubtedly the leading role in the capital market.

Thanks to the strong performance of the capital market during the plunge, rebar became the only hedge asset and was dubbed "thread gold" by the industry.

According to the twenty-first Century economic report reporter, the last time thread steel was so concerned about the market that it should be traced back to the first half of 2016. When the steel price just came to the bottom, it began a strong rebound for three years, taking advantage of the east side of the supply side reform. However, with the completion of the 1.5 billion tons of production capacity ahead of schedule in 2018, the whole industry began to be dull in 2019.

Until the outbreak of the disease, even gold was not safe, the rebar remained unmoved until March 18th.

The other side of the price is strong, but it is high steel daily production data, a record high social inventory, and listed steel enterprises "sales impact is not only one of us" helpless sigh.

What's wrong with thread gold?

Traders' confusion

As a reflection of the macro economy at the micro level, the strength of rebar has caused a ripple in the capital market.

Recently, Liu Yuhui, chief economist of Tianfeng securities, commented in a circle of friends, "if Rowen Jin is not gold, it is not a bad thing for A shares at all."

For those on the front line, the price of rebar is distorted.

First look at a set of data, opened in February 3rd to March 18th, at the settlement price, screw steel main contract 2005 rose 1.28%, the same period, the main crude oil 2005 contract fell 46.76%, the traditional hedge products gold and silver futures contract period fell 2.54%, 28.92%.

On the same day, the cumulative increase of the 2011 and 2012 contracts of the rebar month is 4.23% and 4.29% respectively. Under the background of selling off risky assets and risk assets, rebar has turned into a safe haven.

Su Yu (a pseudonym) is a general manager of an information management company in East China. In mid December 2019, his team issued an early warning to the US stock market. "Our tracking and judgement on foreign countries are more accurate. We made a prejudgment in advance and made a firm commitment to bear the short positions in the US stock market. Basically, from the high point of the US stock market, the products sold by the company achieved a 106.67% annual turnover. Benefit rate. "

In his product portfolio, in addition to the stock strategy of "multi A shares and short selling stocks", he also allocated commodity commodities to cooperate with bonds, interest rates and precious metals.

However, the abnormal performance of thread steel in recent years has puzzled him.

"Bonds are telling you that the economy is very poor. They are very worried. Thread is telling you that the economy is very good in the name of infrastructure. If you believe that the world economy is now in a peaceful and dynamic environment, you can give up bonds; if reality is very tragic, then who is right?

In fact, since the completion of the domestic steel industry ahead of schedule in 2018, the main logic of driving up steel prices has disappeared. At that time, the industry generally hoped to shift the driving force to the demand side through the downstream infrastructure.

Facts have proved that infrastructure investment in 2019 has indeed increased, but the annual growth rate is only 3.8%, and the price of rebar in the current period is also down.

Entering the 2020, the new crown outbreak broke out, and downstream demand was more seriously affected. "The downturn in demand side is a fait accompli, which is not just that China's economic growth rate can no longer be lifted, the overall leverage ratio is limited, and the external environment under the impact of the epidemic, the kinetic energy began to stall, which in turn will affect domestic." Su Yu thinks.

According to his judgment, the economy of itself and its periphery has been in a state of decline or stop, and it is unlikely that the economy will immediately retaliate.

As a result, in March 19th, when the rebar futures fell more than 4% in early trading, a long downward line was pulled out on the same day. In March 20th, the 2005 contract as a main force increased slightly.

Expected price

"Due to the Spring Festival holiday and epidemic situation, the downstream construction has been postponed and the demand has been reduced for a short time, and the stock of the company's products has increased slightly. If the subsequent resumption of production continues to delay, the company will adjust the product mix and production plan according to market demand changes, and consider production reduction if necessary. " 000932.SZ said in mid February that it had accepted the agency's research.

Prior to that, CSC also issued a note that the steel market downturn, crude fuel and steel prices fell sharply, resulting in impairment of enterprises, some enterprises are even facing greater risks.

In fact, in the first two months of this year, the epidemic continued to ferment. After the holiday, the steel market was slow to start, and the downstream demand dropped sharply.

Taking the downstream industries of building materials as an example, domestic fixed assets investment decreased by 24.5% in the 1-2 months, real estate investment decreased by 16.3% compared with the same period last year, and infrastructure investment decreased by 30.3% compared to the same period last year.

The steel industry also has the characteristics of continuous production. During the Spring Festival holiday and the continuous production of steel, the daily output of crude steel remains high, and the downstream demand has not improved.

Lange steel statistical results show that as of last week, the social inventory of 29 key cities was 23 million 127 thousand tons, an increase of 47.2% over the same period last year. Steel social inventories have risen for 12 consecutive weeks since the end of December last year, reaching a record high for three consecutive weeks.

However, the prominent contradiction between supply and demand has failed to stop the strength of many black commodities such as rebar, hot-rolled coil and wire rod. The reason is nothing more than the optimistic expectation of the whole industry for the future, and it is the expectation that it can not be falsified in the short term.

What is the dream of CITIC futures black team in a thread gold? "In the report, it is pointed out that" after the domestic investors see the effective control of the domestic epidemic, it is expected that the government will make efforts in the areas of ensuring growth and steady employment, and the demand will be greatly improved. "

Futures price is an early reaction to the anticipation of the future. Under the market atmosphere of "do more anticipation", the screw steel is more and more stable.

In this regard, Su Yu pointed out that the government may increase the intensity of countercyclical regulation, but the current economic structure is different from that of 2008. The proportion of the service sector has increased substantially. "Infrastructure is nothing more than the effect of hedging, rather than the main driving force for economic growth. At the same time, the global economic recession is not easy to cope with by counter cyclical adjustment.

He believes that the center of the storm will be in the United States, but because it is the largest economy, the dollar is the world currency, so no one can survive, and China is no exception. The difference is that China's defense is the best.

However, his judgment and opinion obviously can not have a decisive impact on the price of the whole market. In the market where the demand for the downstream can not be falsified, the optimistic expectation will continue to support the "thread gold".

Inevitable decline

Although the price performance of rebar has been very outstanding, it is a different sight to further track the operation of enterprises.

"According to the calculation results of cost profit model, in March 13th, the profit of three grade rebar steel per ton was 123 yuan, and the average seven tons of steel including thread and billet was 103 yuan." Wang Guoqing, director of Lange Iron and Steel Research Center, said.

This is not the lowest value. The low point appeared at the end of February this year. At that time, the profit per ton steel of grade three rebar was once reduced to 79 yuan.

In the same set of calculation models, the profits of the seven varieties in the 1-4 quarter of 2017 were 480 yuan, 399 yuan, 954 yuan and 1044 yuan respectively.

This is the result of the current industry's initiative in reducing production and price protection. If the price of steel continues to fall, it will soon break down the cost line of the steel plant and fall into the situation that the price of steel can not be sold on Cabbage in 2015.

The immediate problem is the tragic drop in sales volume.

According to seasonal consumption rule, the downstream will start on schedule after the Spring Festival every year, but the need for epidemic prevention and control this year will greatly delay the demand node, which will lead to a decline in the sales volume of the whole industry.

In response, a listed steel company in Southern China admits, "affected by the epidemic, there is a certain pressure on sales."

"The affected families are not the same as the whole country, and the progress of resuming work and resuming production will be improved." A listed steel company in North China said.

However, when asked whether the current sales were showing signs of improvement, he said, "many places (Guan Kong) have not yet let go."

The price is approaching the cost line, the sales volume is significantly affected by the epidemic, and the price volume performance is weaker than that in the same period in 2019. In the quarterly report that will be disclosed in the future, the listed steel enterprises will inevitably decline.

Not to mention growth or equity, enterprises that do not lose money when operating profits are good.

Reflected in the two tier market, although iron and steel stocks occasionally changed, but in essence, it is expected speculation, rather than the upgrading of business capabilities.

From February 3rd to March 20th, the SW steel industry decreased by an average of 5.05%, of which sub industry Pu steel fell 6.52%, which is basically the same as that of the lower real estate and motor vehicles.

In the meantime, the northern capital has also been reduced to varying degrees. Taking only the head steel enterprises as an example, the proportion of capital holding shares to free floating shares in 600019.SH was 11.33%, which dropped to 9.28% in March 19th and 000932.SZ from 5.45% to 4.37%.

However, the proportion of northward capital shareholding between the two companies of Baotou Steel Group (600010.SH) and Anshan Iron and Steel Group (000898.SZ) increased slightly.

However, compared to the billions of net profits in 2018, the "old story" of infrastructure investment has been difficult to bring the industry boom to the peak, at the very least, it provides a full of uncertain breathing opportunities.

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