As of the 27th, August steel prices showed a trend of rising first and then lower, the steel composite price index rose 5.12% month-on-month. In terms of varieties, the long product price index rose 6.03%, and the flat steel price index rose 3.40%. The iron ore composite price index rose by 6.14% month-on-month, in line with expectations. Looking ahead to the steel market in September, it is expected to emerge from the situation of first suppression and then promotion.

At the beginning of September, steel prices still have adjustment pressure. On the one hand, it is necessary to digest the price in the early period and increase rapidly, while the fundamental changes have not kept up with the pressure. Since the author of the Shanghai meeting on July 10 put forward the steel price to create a new high in the year, the spot steel comprehensive price index rose by 300 points, the rebar price index rose by 450 points, and the threaded futures rose by more than 400. The face has not changed much (the inventory in August was basically flat). The direct trigger for this round of steel price increases is Tangshan's environmentally limited production, from July 20 to the end of August. However, under the influence of the traditional off-season and the resumption of production in some steel mills in Xuzhou, the effect of the supply reduction caused by the limited production was greatly reduced, so that the inventory in August was almost unchanged. In addition, the price is also at a relatively high level in history, and the inventory profit in the previous period is also relatively rich. Therefore, the market is relatively cautious, and the callback began to appear in late August. The author believes that only when the fundamentals are further improved, the steel price will rebound in a new round. On the other hand, the pressure of adjustment comes from the pressure on the macro-environment to face the intensification of the Sino-US trade war. The recent Sino-US trade consultation ended and no consistent results were achieved. Although the current impact of the $50 billion tax on goods in the past does not seem to be significant, if the 200 billion US dollars of goods are subject to tariffs, the impact cannot be ignored. The future may bring more than just psychological expectations, and it is more likely that there will be substantial damage in the near future. Therefore, at the beginning of September, both the financial level and the physical level may bring further disturbances, and steel prices are also under pressure.

In September, there is still room for rebound in steel prices as the fundamentals of supply and demand have improved, mainly because:In terms of demand, September is the traditional peak season for consumption. According to the statistics of the National Bureau of Statistics, the real estate construction area and new construction area increased by 3% and 14.4% respectively in the first seven months, and the growth rate is still increasing. In September, when the high temperature subsided and the rain decreased, the real estate steel will have a growth performance; In July, China's new ship orders and hand-held orders continued to grow, and the decline in shipbuilding completions narrowed. The conditions for infrastructure construction have further improved. Recently, several provinces and cities have held relevant meetings to speed up the layout, actively improve effective investment, and implement infrastructure supplements. Board, a series of major infrastructure projects were approved. The July Manufacturing New Order Index and the Steel Industry New Order Index were 52.3 and 58.7, respectively, both in the expansion zone. As far as I know, most steel mills have basically filled orders in September. Judging from the production and sales in August, there is no need for advance overdraft demand. Therefore, the demand in September is still worth looking forward to, and it is expected that there will be a phenomenon of steady growth, steady increase, and slight increase.

From the perspective of supply, supply is expected to stabilize in September. On the one hand, high profits stimulate high output, especially September is the month before the upcoming autumn and winter limited production, the manufacturers are more enthusiasm for production; on the other hand, environmental protection and production restrictions will still restrict the release of supply. Although the limited production of Tangshan in July ended at the end of August, Tangshan’s air quality ranking in August is still in the bottom of the list, and it is not ruled out that production will continue in September. The limited production at the end of August in Anyang, Henan Province also affected the supply in September. The region has also joined the ranks of limited production. In addition, maintenance has also occurred. For example, a blast furnace in Nangang has been shut down for maintenance for 3 months since September 1, affecting 5,000 tons of molten iron per day; Angang, Bengang and so on have also joined the ranks of maintenance.

Therefore, from the perspective of supply and demand, September is still expected to maintain a good momentum, and inventory is expected to continue to maintain a low level or even a slight decline. The National Political Bureau meeting emphasized that active fiscal policies should be more active, monetary policies should be more moderate, and fiscal and monetary policies should better serve the real economy. It is necessary to speed up the issuance of local bonds, and emphasize that local bonds are equivalent to national debts and escort the issuance of local bonds. Zhu Hexin, deputy governor of the central bank, stressed that finance should better serve the real economy and effectively alleviate the difficulties of financing and financing. The recent financial market capital interest rate has dropped significantly, alleviating the pressure on the real economy. It is not excluded that it is possible to boost demand and further improve the relationship between supply and demand.

In addition, the moderate correction of futures prices (threads, coke main contract calls back to the 30-day moving average) is expected to stabilize and rebound, the original fuel prices still have room to rise, especially scrap and ore, there is some support for steel prices.

In short, in September, the steel market, with the gradual arrival of the traditional consumption peak season, is expected to go to inventory slightly, superimposed on the high price of raw fuel prices, steel prices are expected to regain the rebound after digesting pressure and bad news.

Risk warning: the environment is changing, the viewpoint will change, and the latest opinions will be paid attention to in time.

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