Today’s steel market review
Today’s steel market was dominated by modest gains. By the end of the day, the main rebar contract closed 4066, up 60 points from the previous trading day; the main hot coil contract closed 4172, up 61 points from the previous trading day; the main coking coal contract closed 1825, up 25 points from the previous trading day; the main coke contract closed 2701, up 16 points from the previous trading day; the main iron ore contract closed 865.5, up 18.5 points from the previous trading day. 18.5 points. As of 16:00 on the 15th, in terms of finished products, the average spot price of rebar on Lange Steel was 4,177 yuan, up 16 yuan from the previous trading day; the average price of hot coils was 4,213 yuan, up 28 yuan from the previous trading day. In terms of raw materials, the price of imported PB powder at Jingtang port was RMB885, up RMB10 from the previous trading day; the price of quasi-grade metallurgical coke at Tangshan was RMB2,700, flat from the previous trading day; the ex-factory price of steel billet at Qianan leading steel mill in Tangshan was RMB3,800, up RMB30 from the previous trading day.
Steel Market Analysis
Today, steel prices in general rebounded slightly. Building materials, plates, profiles and other varieties of slightly higher, more than 20-30 yuan up mainly, part of the market electric furnace steel slightly up, a few markets still remain stable. However, after the shipments turned weak, not this day before the fire; merchants also take advantage of the small price increases in shipments, terminal purchases have not been a large number of centralized stocking situation, the market trading is still on the cautious side.
The reason why the market can continue to rebound today, there are two main reasons.
The first is that overnight U.S. CPI data makes the market overall or strong, black, copper, these industrial bulk varieties bias up mainly. The U.S. CPI in January grew 6.4% year-on-year, lower than the previous value of 6.5%, but exceeded expectations of 6.2%; quarterly CPI growth of 0.5%, unchanged from expectations, the previous value revised upward to 0.1%, in addition to housing prices, the core service inflation growth rate continued to fall back. An important indicator that has been influencing the Fed to raise interest rates is this cpi data, which shows a further reduction in inflation, which has shortened the expectations of the Fed’s interest rate hike cycle, and even the speculation of a rate cut opening at the end of the year has come and gone. Last year was the time when the Fed raised rates the fiercest by 75 basis points in a row, and when many industrial prices fell the most. If the rate hike cycle does end early, it will undoubtedly create a favourable external financial environment for the black. However, there is still uncertainty about the overall trend of falling US inflation but the rate. Asset prices are cautiously optimistic in the short term but volatility may increase. The Fed doves “second-in-command” left, the impact on the Fed immediately. It could lead to the Fed being more aggressive in raising rates this spring.
The second is that yesterday’s sudden turnaround in transactions triggered the return of demand for resumption of work beyond expectations. As of the current situation, the start of work in the country’s performance is mixed, northwest, northeast is still in a relatively low recovery, the better southwest, central and east China is relatively in the leading low. However, despite the start of work, the problem of funding is also relatively large, local financial constraints, the formation of the release of steel demand conditions are not enough. These two days, the steel market appeared to ship a better outbreak point, such as Shanghai 8 mainstream hot volume warehouse inventory fell 18,000 tons today, a total of less than 440,000 tons, this data is lower than the level of the same period in the past five years. Then again, Xi’an building materials shipments for two consecutive days also remain at a good level. There are also steel mills that have stopped taking orders due to better order taking conditions, or the amount of orders taken is hot. But this is all local state, not all of the market, the real demand improvement, still need time.
In addition, today’s market once again appeared to prevent the price of housing too fast heating up information. As the Economic Daily News said in an article: real estate market support policies need to be more precise to prevent housing prices from returning to the track of rapid rise and mentioned that “the house is for living, not for speculation” positioning has never changed. The real estate market has generally entered a stable development track, the price of housing short term rise fear difficult to reproduce, in order to speculate for the purpose of purchasing a great risk. The Ministry of Housing and Urban-Rural Development, on the other hand, stressed the importance of mapping all types of housing buildings nationwide and forming a “digital identity card” for housing buildings. This will also have a thorough mapping of the inventory of properties. In any case, the steel market improvement, need to rely on the effective rebound of real estate.
Price forecast
From the current point of view, the market after yesterday’s sudden turnaround in transactions, did not continue yesterday’s hot state. Although the turnover improvement is a seasonal return, but the sudden transaction hot situation is difficult to sustain. On the one hand, with the fast supply and slow demand leading to continued high inventory, the market is not worried about the shortage of goods. On the other hand demand recovery is a slow process, the post-epidemic period will not be like FMCG products to produce retaliatory consumption of the problem, demand is better than expected or worse than expected, need time to verify. But the economic recovery is established, this year’s macro environment and market performance, will be better than the epidemic serious vulnerable period in the second half of last year. In the short term, steel prices should not be premature to see a big rise, a big fall, a small shock is the norm, the normal trend.
From the plate, the black overall strength, iron ore soared close to the previous high. The futures snail 05 reduced positions to the upside, the top 20 seats more positions by 4,450 hands, short positions by 15,161 hands, Huatai futures increased by 11,000 hands more single. Total positions fell by 14,600 hands to 1,896,000 hands. From the position up, the price fell below 4000 after the short actively reduce positions, and accompanied by a moderate amount of long positions to maintain the rally rhythm. From a morphological point of view, the daily maximum is back near the starting position, and the daily K is still below the 20-day average. The next day need to continue to observe the above 4080 near the effective breakthrough, once the breakthrough, do not rule out the impulse on 4100 may. But the daily pattern and weekly pattern contrary, if not like iron ore warehouse volume release to promote the words, up space is also limited.This article is from: Lange Steel
Post time: Feb-18-2023