Looking back at October, after the long holiday, the domestic construction steel market ushered in a brief "good start" market, but due to the impact of the epidemic, the capital market trend is not good, the black futures continued to fall, driving the demand and price down. On the whole, the "gold nine" did not see, "silver ten" broke the contract, the expectation and reality of the double disturbance, leading to the domestic construction steel market price spike down. We expect that the fundamentals of the industry will not improve substantially after entering November: on the macro level, the Federal Reserve will continue to raise interest rates. Although the domestic economy is stable and improving in the third quarter, the recent negative impact of the epidemic control on some regions is emerging, and it is difficult to predict whether the prevention and control can be relaxed in the later stage. On the supply side, the current loss of some steel mills is aggravated. In addition, after entering the heating season, the scope of limited production in North China is expanded, and the supply pressure is expected to be reduced in the later period, but the cross-regional liquidity of resources is enhanced, and the "southward flow of north steel" is inevitable. On the demand side, although infrastructure investment continues to make great efforts, the real estate industry is still not out of the decline. As the temperature drops, the construction in northern China will decrease, and it is difficult to fully expand the demand in the later period. On the feedstock side, coke has seen a drop, the price of imported iron ore has weakened, the demand for scrap steel has decreased, and the production costs of steel mills may fall. In conclusion, with the end of the traditional demand season, both supply and demand are facing a weakening situation, and the repeated epidemic has suppressed market expectations. On the premise of no major positive release, we hold the following judgment on the market in November: demand is weakening, the center of gravity is moving down -- it is expected that in November the Shanghai market of high-quality rebar on behalf of the specification price (index as the benchmark), or will run in the range of 3900-4200 yuan/ton.
In October, due to the impact of epidemic control in many places, the release of terminal demand was hindered. Although infrastructure investment continues to boost, it is difficult to hide the decline in the real estate industry, and overall demand continues to decline year-on-year.
In November, as the temperature drops, local demand will be differentiated. Stimulated by the demand of "rush period", local transaction may have staged growth, but it cannot reverse the overall trend of weak demand in the later period. We judge that the domestic demand side will remain resilient in the first half of November, and then gradually weaken in the second half.
