On the whole, rebar (5155, -254.00, -4.70%) presents the characteristics of weak supply and demand, and reality is stronger than expected. Supply constraints have strong support for prices, but the decline in demand intensity will also restrict the price of rebar.

　　 From October 2021 to March 2022, the domestic crude steel reduction task is relatively heavy, and the supply of rebar is likely to remain low. Although the demand for construction steel has declined, the supply contraction will still promote the rapid depletion of quarterly rebar stocks. However, the growth rate of real estate investment may further decline. Demand in the Northeast market will reach a freezing point in early November. From a national perspective, the overall construction steel demand will face a seasonal decline in early December. The current high price of rebar has a negative impact on winter storage demand. The Beijing-Tianjin-Hebei heating season will limit production on rebar capacity. Relatively limited. The rebar futures price and production profit remain high, and the market is more cautious about the future price of rebar. The current 2201 contract is discounted to the spot, and the disk is expected to weaken.

　　 Fiscal policy is expected to increase

　　 From the perspective of fiscal expenditure, the expansion of fiscal expenditure this year is weaker than in 2018 and 2019. With the slowdown of domestic economic growth and the gradual emergence of growth pressure, the central government has increasingly referred to fiscal policy "cross-cycle adjustment", and fiscal policy is expected to increase in force in the fourth quarter. Since August, the issuance of new local government special bonds has accelerated significantly. Among them, 488.4 billion yuan was added in August and 523.1 billion yuan was added in September. As of the end of September, the cumulative issuance of new local government bonds for the year totaled 2,366.1 billion yuan, which was 64.82% of the budget target.

However, the expansion of implicit debt of local governments is still strictly controlled, and high-quality infrastructure projects are limited, which may restrict fiscal efforts to boost economic growth; downward pressure on domestic consumption and investment growth is increasing, and it is necessary to reduce enterprises, especially small and medium-sized enterprises. Financing costs are used to support investment and consumption; although short-term exports still have some support, the time node for peak external demand is approaching, downward pressure on manufacturing investment is increasing, and a certain amount of forward-looking hedging is required. The sharp rise in commodity prices still poses a certain constraint on the overall easing of liquidity, and short-term monetary policy will be mainly structural easing.

　　 In terms of steel import and export, China’s steel exports in September were 4.92 million tons, a decrease of 2.7% from the previous month; imports were 1.256 million tons, an increase of 15.4% from the previous month. From January to September, China’s cumulative steel exports were 53.024 million tons, an increase of 12.643 million tons or 31.3% year-on-year; the cumulative imports of steel products were 10.716 million tons, a year-on-year decrease of 4.354 million tons or 28.9%. On the whole, under the background of supply compression, steel exports will further decline, steel supply in the domestic market is reduced, bifocal cost support is strong, domestic prices are supported to a certain extent, and steel exports are restrained, while the supply and demand of overseas steel markets are gradually loosening , China's steel export new orders index continues to be in a contraction range, and steel exports may continue to fall in the later period.

The cumulative real estate investment from January to September increased by 8.78% year-on-year, and in September it increased by 10.21% year-on-year; the cumulative area of new construction fell 4.46% year-on-year, and the year-on-year decrease of 13.54% in September, which will affect future steel demand; the cumulative housing construction area increased by 7.94 year-on-year %, a year-on-year decline of 10.03% in September. In the past three months, the construction area has declined significantly year-on-year, and the sales area has also been declining in the past two months. The overall data is average, but better than the absolute level, so there is still a certain degree of resilience in the later demand.

　　 Crude steel production reduction task is heavy

　　 Since October, the policy of dual control of energy consumption has been relaxed. Steel plants in Guangxi, Shandong, Jiangsu, Sichuan and other places have resumed production, and the output of molten iron and steel has rebounded from the previous month. However, the task of reducing crude steel output in the fourth quarter is still heavy. According to policies and documents issued by various regions, most provinces are under equal control. However, Hebei and Shandong, the major crude steel production provinces, require reductions in crude steel production by 21.71 million tons and 21.71 million tons respectively. 3.44 million tons. The Ministry of Industry and Information Technology proposed to resolutely reduce crude steel output. This year, it requires the country to reduce the actual output of crude steel by 25 million tons, corresponding to the average monthly output of 2.5144 million tons from September to December 2021, a year-on-year reduction of about 20%. It needs to be reduced by about 6.4%; based on an estimate of 1.06 billion tons of crude steel output in 2020, assuming that the annual crude steel output does not increase, the crude steel output from September to December will fall by 10% year-on-year, and the crude steel will be reduced by 25 million tons year-on-year, a year-on-year decline. About 16.5%.

On October 13, 2021, the Ministry of Industry and Information Technology and the Ministry of Ecology and Environment formally issued the "Notice on Launching Staggered Production of the Iron and Steel Industry in the Heating Season of 2021-2022 in Beijing-Tianjin-Hebei and Surrounding Areas", requiring Beijing-Tianjin-Hebei 2+26 cities to be released on November 15, 2021. From January 1, 2022 to March 15, 2022, to ensure the completion of the target task of reducing crude steel production in the region; from January 1, 2022 to March 15, 2022, to reduce the increase in air pollutant emissions during the heating season, in principle The staggered production ratio of iron and steel enterprises in the relevant regions in Shanghai was not less than 30% of the crude steel output in the same period of the previous year. According to the crude steel reduction tasks and production in 6 provinces and cities of Beijing, Tianjin, Hebei, Shanxi, Shandong, and Henan in 2021, the reduction in crude steel production from January to March 2022 may theoretically reach 30 million tons. Even stronger than September-December 2021. However, it is more noteworthy that the production capacity of hot coils (5470, -144.00, -2.57%) in the regions affected by heating restrictions accounted for close to 50%, and the production capacity of rebar was less than 30%. Big.

　　 Rebar demand strength decreases

From a year-on-year perspective, with the economic cycle down, September real estate data sales were not good, and land auctions in many regions were unsuccessful. The focus of capital expenditures for real estate companies shifted to the completion of construction. The consumption intensity of domestic construction steel decreased significantly; from a month-on-month perspective, The peak season for construction steel demand has passed halfway. Due to the cold winter environment this year and the early Spring Festival in 2022, the current northern market demand is shrinking, and there are almost no transactions. The demand in East China and South China can be maintained until early January next year. On the whole, terminal demand for construction steel across the country will face a seasonally weakening situation in early December, and the spot price of rebar is related to the willingness of traders to store winter.

　　 At present, the rebar inventory is still in the state of destocking, and it is expected that the destocking can be maintained until early December. Based on the initial inventory in the past years, the inventory at the beginning of this year will be around 5.2 million tons. Starting from the depot on October 14, 2021, to the beginning of December 2021, the average daily depot rate will remain at 1.8%. The rate of destocking is maintained at about 5%; the future storage cycle of rebar is expected to start from mid-December this year and continue until early March next year. The cycle is about 3 months. After the overall inventory reached 15.45 million tons, considering the strict reduction policy this year, from market research feedback, the current market winter storage willingness is not strong, there may be passive accumulation, and the overall accumulation may decrease by 15.8% year-on-year.

　　 Looking at the spot market by region, the Northeast market will immediately enter the off-season for steel demand. If there is spot inventory, it is recommended to discard the spot and to clear the inventory. The speed of depot in East China is acceptable. Taking advantage of the good market sentiment, the shipment will be the priority; if there is less or no inventory, it is recommended to pick up a small amount of the spot on the bargain-hunting, and ship the goods at the high-end. In the later stage, the focus will be on whether the price of rebar can increase the willingness of traders for winter storage. The fundamentals of rebar are facing both weak supply and demand. In the short term, the price will not rise or fall sharply. It is recommended to operate in a range or short rallies (above 5800 yuan/ton). In addition, the limited production in the heating season in Tangshan has a greater impact on the supply of hot coils, and it is looking for investment opportunities caused by changes in the price difference of coils. (Author's unit: Beijing Agricultural Union Zhongxinyuan Asset Management Co., Ltd.)