This article is the last article in the series of "Analysis of Coil Snail Difference", in the "Analysis of Coil Snail Difference" series one, we talked about the definition of the coil difference, the calculation method of the coil difference, the main influencing factors of the coil difference, the demand and price characteristics of rebar, the demand and price characteristics of hot-rolled coils, and the relationship between the coil difference and the real estate cycle. In the second series of "Analysis of The Spiral Difference", the author mainly analyzes the relationship between the coil difference and the manufacturing cycle. In the third series of "Analysis of Coil Snail Difference", the author analyzes the influence relationship between supply and demand on the volume snail difference, and at the same time preliminarily analyzes the relationship between the volume screw difference and the inventory difference. In this article, the author will continue the content of the previous article, explore the relationship between inventory difference and volume conch difference, and analyze the reasons why the negative correlation relationship is not established in different time periods.
Eighth, the seasonal change law of the spiral difference
The demand for rebar has the characteristics of seasonal changes, that is, the consumption of rainy season and winter is small, and the consumption of years later, summer and autumn is high, due to the existence of this feature, the price of rebar also shows seasonal fluctuations. Hot coil is mainly used as a raw material for industrial products, and its processing and production are mostly carried out indoors, which is less affected by the rainy season and winter. Therefore, when the rainy season and winter, the price performance of threads is often weaker than that of hot coils, and when summer and autumn, the price performance of threads is often stronger than that of coils, and after the Spring Festival, it belongs to another situation.
The author sorted out the data on the rise and fall of the coil difference from 2007 to 2020 and produced Figure 1. It can be seen that in January and December, the probability of the spiral difference rising is very large, because at this time the north enters the winter, the demand for rebar decreases, and the price performance is weak. Due to the increase in precipitation around June, the demand for rebar is not conducive to construction, and the price performance is also a large probability of strong and weak coils. The month with the greatest probability of falling spiral differences is most likely to be April or November, when thread demand is generally very strong and the price performance is stronger than that of hot coils. This graph only represents the magnitude of the probability, not the general trend of the volume difference.
Figure 1: The probability of the spiral difference rising and falling in each month in the past 14 years
Nine, short-term factors caused by the relationship between the screw difference and the inventory difference is abnormal
From the analysis of series three, we can see that the coil difference and the inventory difference should generally be negatively correlated, but it should be noted that in some time periods, this relationship may not be established. In short, when the demand strength of threads and hot coils is similar, we need to pay attention to indicators other than inventory differences to determine the direction of the coil difference.
The most typical is around the New Year. Before the Spring Festival, thread and hot coil stocks are greatly accumulated, due to the large rebar reservoir, the inventory accumulation speed and quantity are higher than the hot coil, the inventory difference (hot coil - thread) often drops sharply, and the coil snail difference tends to oscillate rather than rise sharply in reverse. The reason is that most of the workers are preparing to go home for the New Year during this time, and the overall demand for steel is weak, and the changes in inventories and prices are decoupled at this time. After the Spring Festival, steel demand is generally not started until after the Lantern Festival, at this time the demand for hot coils and threads are better times of the year, but due to the excessive accumulation of inventory suppression, it is generally difficult for prices to rise sharply, and the screw difference is generally a shock trend.
In other cases, the coil snail difference may also appear to be abnormal at individual times, for example, in August and September, it is often the probability of the spiral difference falling is larger, but in 15 and 16 years, it is the spiral difference that rises, which is the abnormality caused by the long-term operating trend of the spiral difference on the short term.
10. The relationship between the coil difference and the inventory difference caused by long-term factors is abnormal
From the eighth and ninth parts, it can be seen that July, August, September, and October are often the months with better thread demand, when the coil difference generally tends to fall, and the inventory difference tends to rise, but in some years this relationship may not be established. For example, in 2015 and 2016, we can see that in the peak demand season for threads, although the inventory gap is rising or maintaining a high level, the coil is also rising or running at a high level, and does not show a negative correlation.
The reason is very simple, we have actually analyzed in series one and two series before, the manufacturing industry as a whole in these two years is in the rising cycle, and the real estate is in a downturn, under such a macro environmental impact, the overall spiral difference is strong, it is not difficult to understand why it is strong in the short term, but when we postpone the observation time a few months later, we will find that the overall spiral difference and inventory difference are still negatively correlated, which is the short-term embodiment of the long-term factors on the spiral difference.
Another law is that when the inventory difference is at a low point, the screw difference is not necessarily at a high point, or immediately reversed; but when the inventory difference is at a high point, the coil difference is often at a low point and is immediately reversed, the reason is that the thread variety as a whole is stronger than the hot coil, and the specific will not be repeated.
Figure 2: Abnormal period of relationship between coil and inventory difference
epilogue:
After four series of analysis, it can be said that we have basically analyzed the coil difference very thoroughly, and here is a summary:
1. The relationship between the spiral difference and the real estate cycle:
When the real estate industry is in the boom cycle, the rebar price high point moves up, the fluctuation amplitude becomes larger, because the price of hot coil is relatively stable, at this time the coil conch difference (hot coil - thread) will shrink, while the fluctuation amplitude will increase. When the real estate industry is in the boom cycle, the rebar price high point moves down, the fluctuation amplitude decreases, and the same hot coil price is relatively stable, at this time the coil difference will expand, and the fluctuation amplitude will decrease.
2. The relationship between the screw difference and the manufacturing cycle:
When the manufacturing industry is in the rising cycle, the spiral difference tends to expand, and its reaction will be advanced in the manufacturing cycle; when the manufacturing industry is in a recession cycle, the spiral difference tends to shrink, and its reaction is often delayed in the manufacturing cycle, that is, when it rises, it is half a body ahead of the manufacturing cycle, and when it falls, it lags behind the manufacturing cycle by half a body.
3. The relationship between the coil conch difference and the cost profit of steel:
The coil difference is a manifestation of profit (it is a logical misunderstanding that the coil difference and the symbol profit have a correlation).
4. The relationship between the screw difference and the inventory difference:
When the inventory difference (hot coil-thread) rises, it means that the inventory consumption of the hot coil is worse than the thread, the corresponding demand is weak or the supply is too much, and the price should be manifested as a weak spiral, and the screw difference (hot coil-thread) should decrease. When the inventory difference (hot coil-thread) decreases, it means that the inventory consumption of hot coil is better than that of thread, that is, the demand preference or supply of hot coil is small, and the price should be manifested as weak coil strength, and the coil conch difference (hot coil-thread) should rise.
When the inventory difference is at a low point, the coil difference is not necessarily at the high point, or it is reversed immediately; but when the inventory difference is at a high point, the coil difference is often at the low point and immediately reverses.
5. Seasonal characteristics of the coiled screw difference:
The snail difference in the rainy season and winter tends to rise, the snail difference in summer and autumn tends to fall, and the snail difference after the Spring Festival tends to oscillate.
6. Factors that cause abnormal operation of the coil screw difference:
Short-term: when the demand intensity of threads and hot coils is similar (generally after the Spring Festival).
Long-term: The operation of the manufacturing cycle and the real estate cycle.
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