"From the current scrap steel market, we can clearly feel that this year scrap winter storage market is not ideal.Insiders told China securities journal reporters.However, from the current situation of the industrial chain analysis, after the Spring Festival scrap steel market or will appear a wave of upward market, and or more than 100 yuan.

According to the introduction, during November to December 2018, due to the market downturn, and generally bearish market trend in 2019, steel mills are mainly to reduce inventory, and at the beginning of the winter storage will be low, but with the market recovery, the current confidence of some enterprises recovered slightly, traders operation is more cautious.

Cao ying, an analyst with sdic anxin futures, said that the overall steel demand performance is still better than expected due to the strong terminal demand in south China and the slight boost to trade demand after the implementation of winter storage policy by steel mills.But the blast furnace starts up basically maintains the low level, the electric arc furnace starts up also is weak, therefore the steel stock accumulates the scope is still inferior to anticipates.

On the spot market, last week, steel spot down slightly, thread national average price down 21 yuan to 4041 yuan/ton, hot coil down 10 yuan to 3742 yuan/ton.Last week, the thread of social inventory increased 9.4 percent, plant down 6.6 percent;Hot coil social inventory increased 3.8 percent, plant inventory fell 0.2 percent, the extent of the accumulation of less than expected."Shanghai thread snail procurement rebounded from 25,000 tons to 29,000 tons, and the current performance is still stronger than in previous years.Steel mills have been issued winter storage policy strength is not large, the side that the steel inventory pressure is not large."Cao ying said.

Iron and steel supply, affected by the air blast furnace start is still low.Last week, tangshan bf starts rose 2.44 percent to 53.66 percent, and nationwide they rose 0.13 percent to 64.36 percent.National blast furnace capacity utilization rose to 80.8 percent last week from 80.66 percent.The gross profit of screw thread recovered from 831 to 920 yuan/ton, the gross profit rate was 24.5%, and the gross profit of hot coil recovered to 700 yuan/ton.

Cao ying analysis said, in general, the winter air quality is poor, resulting in low blast furnace start, scrap steel added to remove lead to crude steel supply decline;Demand side performance is still better than expected, the winter storage of rigid demand still exists, so although the contradiction between steel supply and demand is not prominent, but low inventory, large base difference of the probability of steel price shock rebound is large.

From the perspective of profit of steel mills, according to feedback of some steel mills, currently short-process steelmaking is basically in the line of loss, and the profit space of long-process steelmaking is still 100-300 yuan/ton.Jin lianchuang steel analyst jiang runqin said, based on the recession of the market environment, the marginal benefit of scrap steel fell to freezing point, of course, there are various steel mills production process, procurement costs and production limits, and other aspects of the differences formed the current market divergence trend.

From the perspective of scrap market, according to the survey of jinlianchuang, at present, the consumption cycle of most domestic steel mills is concentrated in 7-20 days, with the majority of leading steel mills at the medium level, and the consumption cycle of some large enterprises reaches 30-40 days (belonging to the daily standing stock level).

"Around the Spring Festival, there is a 15-day idle period for scrap steel to arrive, and partial idle period or longer. For steel mills, the current inventory level is not high, and there is an obvious upward trend after the festival.From 2016 to now, every year after the opening of the market, are the above transfer to absorb the main market.Jiang runqin introduced, however, although bullish after the holiday market, but traders still cautious operation, mainly because the steel spot trend is not clear, in short, scrap still depends on the profitability of the steel mill.