1. The basic logic of the spiral snail spread
In terms of production technology, rebar is made of billet as a raw material and ribbed steel bar produced by a small rolling mill. It is mainly used for real estate, infrastructure, including civil engineering construction such as houses, bridges, roads and other public facilities; and hot rolled coil It is a strip made of slab as raw material and heated by a heating furnace by a rough rolling unit and a finishing rolling unit, and generally includes a medium-thick wide strip, a hot-rolled thin wide strip, and a hot-rolled sheet for cold rolling. Manufacturing industries such as rolling mills, automobiles, and ships, and cold rolling and hot rolling in automotive steels account for a large proportion, so automobile production and sales can be taken as an important indicator of the change in demand for hot rolling downstream.
From the perspective of production costs, because hot coil production lines have the characteristics of large investment, high rolling costs and high equipment maintenance costs compared to rebar production lines, it is generally considered that hot coils cost 200-300 yuan / ton higher than rebar. However, from the perspective of spot performance over the years, the price difference between the two varieties does not show a constant constraint on the cost difference. Therefore, we set the median price of coil snails at 250 yuan / ton.
After November 1, 2018, the rebar implementation of the new national standard, after the rebar implementation of the new national standard, due to the increase in the cost of rebar due to the addition of vanadium technology, the rebar and hot-rolled coils due to process differences caused by narrowing the gap. In addition, the state ’s strict environmental protection in the past two years has also forced some small and medium-sized production enterprises, especially private enterprises, to increase investment in environmental protection, including the addition of environmental protection equipment and equipment operating costs. The cost of rebar production has increased by 100 yuan compared with that before 2016. / Ton environmental protection cost.
Calculated based on the new national standard vanadium content of rebar 0.025% -0.03%, the amount of vanadium metal per ton of steel needs 0.25 to 0.3 kg, which is equivalent to 0.48 to 0.58 kg of V2O5 (vanadium). If the price of vanadium is calculated at 150,000 yuan / ton, if the new national standard is fully implemented, the cost caused by the vanadium process will increase by 72-87 yuan / ton.
2.The basic logic of the price fluctuation of coil snails
The median price difference between rebar and hot-rolled coil is determined by production costs, and the fluctuation in coil price difference basically reflects the misalignment of demand. Rebar is mainly used in real estate and infrastructure, and the main demand area for HRC is manufacturing. The cycles represented by the manufacturing and real estate industries are the Jugla cycle and the Kuznets cycle. According to the research results of Zhou Jintao's nesting of cycles, there are two Jugla cycles in each Kuznets cycle. The driving factors of each cycle are different, and volatility differences will be formed in different cycles. In recent years, manufacturing investment has entered a peak period, mainly in traditional cyclical industries, and steel
and energy performance are more typical. From a longer period of view, the equipment investment cycle is at its peak, and real estate investment is more resilient, but it is likely to decline. Considering commodity expectations, the overall performance of rebar may be weaker than hot rolled coils in 2020.
3.Characteristics of price fluctuations of snails in 2019
The fluctuation of the spiral snail spread in 2019 has narrowed significantly. The annual spiral snail spread has fluctuated between -200 and 100 yuan / ton, with the maximum fluctuation range of less than 300 yuan / ton, and the largest fluctuation range in 2018 reached nearly 1,000 yuan / ton.
The overall fluctuation of rebar and hot rolled coil prices in 2019 is smaller than in previous years, which is also the main reason for the small fluctuation of coil spiral spreads. The maximum fluctuation range of the rebar index in 2019 is 819 yuan, and the fluctuation range of hot-rolled coils is 770 yuan, which is narrower than the 2018 fluctuations of 376 yuan and 276 yuan, respectively. Looking at the whole year, the center of gravity of the prices of rebar and hot rolled coils has moved downwards. Since the downward trend of prices was determined in November 18, the fluctuation of steel
products has weakened significantly.
Basically, the automotive industry, one of the major downstream of hot rolled coils, has performed weakly, but it is close to the bottom of the market and rebounded slightly after the second half of the year. The price of hot rolled coils is more obviously fettered by demand. Demand resilience in real estate still exists, but output remains at a high level, and the continued high level of output has limited the rise in rebar prices.
4. Prospect of Spiral Spiral in 2020
Spiral spreads are mainly driven by the mismatch of supply and demand in related downstream. Judging from the development trend of the downstream industry in 2020, the trend of bottoming out of the automobile industry will continue. It is more likely that automobile production and sales will maintain positive growth. Although it is still facing greater growth pressure, the downward pressure is not so large. ; In the machinery industry, construction machinery will still perform well, but processing machinery may show a significant shrinkage. In 2019, the main economic indicators of the machine tool industry such as corporate profits, production, and orders have all fallen year-on-year, and they are facing greater downward pressure than in 2018. The cumulative output of metal cutting machine tools and metal forming machine tools are operating in the negative range year-on-year, and the output of metal cutting machine tools is even more serious.
The current status of the metal cutting machine tool industry reflects the weakness of the entire manufacturing industry and is a direct reflection of cyclical factors. 2020 is still in a period of cyclical decline, and the growth pressure of the manufacturing industry is still large.
In terms of rebar, its main use comes from real estate. At present, real estate still maintains strong toughness, but the downward trend is certain. The downward pressure is still not small, the possibility of a soft landing is large in 2020, and the area of real estate sales may return to the negative range. Once sales problems accumulate, a series of problems such as new construction and land purchase may be triggered, which will directly generate negative feedback on the demand for steel. Infrastructure will continue to be the cornerstone of steady growth, and infrastructure investment will maintain a steady growth trend, which will greatly increase. Less likely.
Once the certainty of steel enters the downward trend, the resilience of rebar supply is stronger than that of sheet metal, and rebar bottoms before hot rolled coils. Comparing the strong and weak relationship between supply and demand, we believe that in 2020, the plate is stronger than the thread, and the spiral spread is treated in a bullish trend.