In May, crude steel production ushered in the peak, but the pressure on destocking in the property market was greater. In the context of oversupply and intensification of contradictions, rebar is not optimistic.

In May, the peak steel production welcome peak data show that the average steel production per day in the country has accelerated since the beginning of April, not only returning to a level of more than 2.1 million tons per day at the beginning of the year, but also creating average daily production in mid-April. The new high is 2,280,200 tons, a year-on-year increase of 7.8%. Mysteel data shows that in mid-April Tangshan blast furnace capacity utilization surged 3.56 percentage points to 91.86%, hitting a new high since late January. The large increase in crude steel production and the rapid increase in the utilization rate of blast furnace production capacity in steel plants are mutually corroborative.

According to the data from the China Steel Association, the country's crude steel production in the first quarter was 18,332,000 tons, an increase of 1.8% year-on-year; in the first half of April, the country’s crude steel production totaled 44.317 million tons, an increase of 4.53% year-on-year. If the country’s crude steel production in April was unchanged from the same period of last year, average daily crude steel output in the second half of April must reach 1,936,700 tons, which is already normal at 2 million tons per day, and is obviously too low in the current production season. Combined with the fact that the utilization rate of blast furnace capacity at the steel mills remained high in late April, we believe that crude steel production in April will be higher than the same period of last year. Judging from the situation in recent years, May is the peak month for crude steel production, and crude steel production is expected to continue to rise in May this year.

Inventory slowed down or further slowed down. In the past 8 weeks, the total contribution of wire rods and rebars to the reduction of steel stocks reached 75%, hot rolled coils contributed 16%, medium plates contributed 5%, and cold rolling contributed 4%, highlighting the demand for building materials. Seasonal features. Moreover, the reductions in both wire rod and rebar inventory were greater than the eight-week reduction in stock levels since the seasonal highs last year, suggesting that the traditional peak season demand for the construction industry this year was better than the same period last year.

However, it is worth noting that the de-stocking rate of rebar has gradually slowed in the past two weeks, from a historical peak of 81,000 tons to 67,000 tons. According to the statistics of the National Bureau of Statistics in the first quarter, except for the year-on-year increase in the construction area, the newly-started area, completed area and sales area all showed negative growth. We believe that the deceleration of late rebar inventory may further slow down.

According to statistics from the National Bureau of Statistics, in March, the sales ratio of commercial housing stocks reached 5.4 months, and the sales ratio of residential stocks reached 4.1 months, a month-on-month increase of 0.5 months compared with February, and both hit a new high since 2012. This shows that the first quarter of the housing market to increase pressure on inventory. Judging from the four-week moving average of commercial housing transactions in 30 large and medium-sized cities, the transaction volume of commercial housing in the first, second and third tier cities decreased steadily in April, indicating that the destocking of the property market remained weak in April.

We have found that the source of investment in real estate development investment is ahead of the increase in investment in real estate development. In the first quarter, the source of real estate development investment funds accumulated a year-on-year growth of 6.6%, a decrease of 5.8 percentage points from the previous two months, the lowest since July 2012; the cumulative amount of real estate development investment in the first quarter increased by 16.8% year-on-year, and declined from the previous two months. 2.5 percentage points, the lowest since December 2012. In the first quarter of real estate development investment sources, domestic ** (including bank ** and non-bank financial institutions**), self-raised funds and other funds (including deposits, advance receipts and personal mortgages**) and other sources of growth are In a slowdown, “other funds”, which accounted for 40% of the funding source, had their first negative growth since June 2012, a year-on-year decrease of 1.9%. This confirms the sluggish sales of commercial housing in the first quarter.

Under the background of the central bank and the China Banking Regulatory Commission warning of real estate risks, banks and non-bank financial institutions may continue to tighten real estate credits, thereby further shrinking the sources of funds for real estate development and investment, and further slowing the growth of funding sources. Therefore, it is highly probable that real estate development investment will continue to slow down in May.