With the steel industry small "Spring Festival Gala" known as the "winter storage", this year came a little late, the recent market inquiry winter storage more and more people, because there is always no a clear result, gradually become a "dilemma", how the situation will develop, caused the conjecture of all parties.In view of this year's winter storage topic, say my view.

I. the origin of this year's winter storage "dilemma"

When it comes to this year's winter storage, the vast majority of steel mills have not issued a clear policy, or even the majority of steel mills do not even solicit intentions.The market slowly felt the winter storage operation in this year into a "dilemma".In my opinion, the main reasons for the poor promotion of winter storage this year are as follows:

1. Steel mills and businesses differ on the current market price.This should be a relatively important consensus, in previous years 3400-3700 winter storage price, steel mills have sincerity, businesses have ideas.However, with the mainstream price of 4200-4400 this year, it is difficult for merchants to make up their minds to buy fewer goods with more money in the background of unclear post-holiday market.And for steel mills, the price is very close to the cost line, if there is cost space, can let out to give everyone winter storage, will let, but most steel mills really have "stripped".Just like the billet, every time the price falls, the market cheers, but no one to ask whether the 3800 billet price is the "conscience" price.The key traders see a completely different market performance from the steel mills. The traders see the market getting weaker and the steel mills are still hanging on.Steel mills see the current price, whether local or foreign, or even foreign, how much can go some, indicating that the price is reasonable.Gradually, their disagreement turned into an awkward conversation.

2. The judgment of the post-holiday market is divided.Steel mills as the industry chain can see the overall picture of a link, the post-holiday market is more optimistic.At least the current price of raw materials after the steel cost support is a consensus.But the business is different, in the face of this century of great changes in the market, it is not optimistic, feel only can not sell goods and make money.The divergence of the market, reflected is that one thinks you should move, one is not moving.

3. A result of the game between the parties.Now the Spring Festival is approaching, the market is a trend of gradual weakening, but the price of raw materials is unusually strong, contradictions are accumulating, and we are waiting for a point to break the game.The hope is that either traders will accept the current price;Or the upstream material can fall back a little, to ease the downstream pressure.But the current strong raw material prices show no signs of easing, and the other parties have little leverage, can only stalemate.

4. Consideration from the strategy of steel mills and businesses.When people are confused, they want to issue policies a little later. On the one hand, they want to refer to the advanced experience and market judgment of others, and on the other hand, they are afraid that their policies will become ineffective if they are simply added by others.For the business, since they are not sure to see again, perhaps the more in the future, the better the policy, the big deal not to do winter storage not to bet.

II. Consequences brought to the market by the "dilemma" of winter storage

If the winter stockpiling stalemate persists, there are several possible developments.One is that steel mills simply have to issue a winter storage policy, which businesses have to accept, but it may affect the amount of winter storage.However the current domestic inventory data is not too bad, the reduction is acceptable to all sides.One is the steel mills grit their teeth and organize large-scale overhaul. On the one hand, they will affect the price of raw materials by reducing production, on the other hand, they will accept part of the pressure of accumulated storage and put their hopes in the post-holiday period.

The essence of the so-called game is compromise, depending on who compromise, compromise in which aspect.Businesses cut back, forming an atypical winter storage, all parties continue to be linked together, is beneficial to the stability of the market.But if there is a large area of production reduction and their own storage, taking into account the conventional production of electric furnace enterprises during the Spring Festival, then it is likely to appear after the festival of steel joint rapid rise, because the current raw material prices, is fully qualified.Therefore, the "dilemma" of winter storage will not become "deadlock".

III. Strategies and Suggestions of the Parties

1. As a steel mill, the winter storage policy still needs to be issued. If you don't try, how can you know whether the market accepts it or not?According to their own local costs and profits, introduce traditional policies, fully reflect the "sincerity" on the price is on the line, the rest of the matter, let the market and businesses to measure.Can match some of the futures above the operation, to judge the pre-holiday futures plate will not be too bad, the post-holiday market recovery period also has the expectation of rise, the only uncertainty lies in the post-holiday to the market before the recovery of the blank period of the spot market trend, so if you want to do the policy cycle can be appropriately shortened.However, we must do a good job in the market does not accept the expectation, and even do a good job during the Spring Festival maintenance and storage preparation.This is not the worst choice. A large area of production enterprises reduce production for the New Year, and the resources are concentrated in the hands of the steel mills after the festival. Under the impetus of the cost, it has the initiative to pull up.Pressure on raw material costs will also ease during this period.

2, for businesses, more storage less storage, how much or to store.Don't look at the rise and fall of the market after the festival, simply said that there is no goods in the hands, the rise and fall after the festival with you have nothing to do, really put the dominant position in the steel mill, the outcome is obvious.Last year there have been steel mills in order to buy back winter inventory operations, do not look down on steel prices determination.As a market participant, the first consideration should be participation.The traditional winter storage, for traders, how much also contains the component of gambling, this year is not allowed to see, then control the risk on the line.

On the whole, I think this year's winter stockpiling will be late, but not absent.There will be even more regional steel mills involved, more new models, new tools.Influenced by the epidemic this year, the Spring Festival market may be different from the past performance.Already, there are signs that construction delays are ending and construction is moving in ahead of schedule due to movement restrictions.Coordinate with the current relatively abundant market funds and demand to consider, the probability of the market ahead of time after the holiday is on the rise.If this situation occurs, a medium-sized overhaul of the steel mill just after the recovery of market demand, the pressure will naturally ease.So, before long, intensive winter storage news will appear.