The demand for sanitary stainless steel pipe in the short term

1. Market review:

In July 2018, the price of sanitary stainless steel pipes rose sharply. At the beginning of the month, it was affected by the macro-level, and the overall commodity fell. However, the sanitary stainless steel pipe itself is still in good condition, the supply and demand are tight, and the overall inventory is still declining. It is at a low level in the same period of history, and the price is basically at a high level. Subsequently, under the influence of the Tangshan environmental protection plus code, the off-season is expected to go to stock, and the sanitary stainless steel pipe began to lead. A series of easing policies were introduced, and the continuation of infrastructure renovation continued to improve demand expectations. At the end of the month, Changzhou environmental protection limited production, but also increased the supply shortage expectations, health-grade stainless steel pipe prices continue to hit a new high.

2. Supply and demand:

Under the implementation of environmental protection and limited production in Tangshan, Changzhou and other places, supply is expected to decline further. It is expected that the national blast furnace operating rate will fall to around 67%. In addition, other cities with lower air quality rankings will follow suit, and the blast furnace operating rate may be further reduced. Overall, the reduction in the supply of sanitary stainless steel pipes is certain, and the reduction is more than expected.

The demand for sanitary stainless steel pipes is tough in the short term and is the risk point for key observations in the later period. At present, the growth rate of real estate, machinery and home appliances is good, but there is a possibility of decline in the later period. In particular, real estate is strictly controlled by the government. Even if there is support for sheds, the high-debt superimposed repayment period of real estate enterprises may be violent. The infrastructure is boosted by the policy. There is a chance for improvement. The expected growth rate of ships and automobiles is stable. As the price of domestic sanitary grade stainless steel pipes is increased or restrained, the RMB depreciation is well hedged.

Overall, the demand for sanitary stainless steel pipes is resilient in the short term and is the risk point for key observations in the later period. At present, the growth rate of real estate, machinery and home appliances is good, but there is a possibility of decline in the later period. In particular, real estate is strictly controlled by the government. Even if there is support for sheds, the high-debt superimposed repayment period of real estate enterprises may be violent. The infrastructure is boosted by the policy. There is a chance for improvement. The expected growth rate of ships and automobiles is stable. As the domestic steel prices increase or are suppressed, the RMB depreciation is well hedged.

3. Hygienic stainless steel pipe stocks continue to be low and profits are good

At present, the sanitary stainless steel pipe inventory is generally at a low level in the same period of history, making the price easy to rise and fall. Corresponding to low inventory is the high profit of steel mills, and the profits of normal steel enterprises' tons of steel are above 1,000 yuan. If consumption is expected to be stable and supply is likely to fall, inventory is expected to continue to fall, and health-grade stainless steel pipe profits have the opportunity to hit the previous high.