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Steel market brief comment: futures continue to explore steel prices can “reverse attack”?

Futures “multi – short” battle, the trend is tangled. When disk sense of power is insufficient, many hair force, continued upward challenge traders expected point, once boosted spot sentiment. But the afternoon disk amplitude again increased, but bears did not form effective suppression, disk down after the transaction increment, once again drive prices up. Spot market quotation mainly with up, but from the shipment sentiment, the difference is larger. Some traders fear high sentiment is obvious, mainly shipping, but also traders reluctant to sell, intended to continue to rise.

Today, domestic black futures price differences are more obvious, raw materials generally fell, the main timber pull up. Although spot quotation has pulled up, but the deal is bleak, the market is reluctant to sell, no one asked more. By the close, rebar main contract closed 4791 up 31 points; Hot coil main contract closed 4882, up 30 points; Coking coal main contract closed 2872.5, down 41 points; Coke main contract closed 3627, down 74 points; The main iron ore contract closed down 3 points at 924.5. As of 16 o ‘clock on the 8th, timber, Lange steel net rebar spot price is 4797 yuan, compared with the last trading day up 7 yuan; Hot volume average price of 4880 yuan, compared with the last trading day up 6 yuan. Raw materials, Jingtang port imported PB powder price of 1000 yuan, compared with the last trading day up 10 yuan; Tangshan quasi level metallurgical coke price of 3200 yuan, flat compared with the previous trading day; Tangshan Qian ‘an leading steel billet factory price of 4520 yuan, flat compared with the previous trading day.

The current market tangled point is mainly the start of demand expectations. If speculation expectations, then conducive to the price continues to rise; If it continues to be falsified, it will accelerate the fall in prices. So the focus is still on what’s happening on the demand side. The most direct stimulation of east China is the manufacturing industry, from the perspective of expectations, hot coil demand is expected to be stronger than rebar. Retail sales of new energy passenger vehicles reached 360,000 units in May, up 91.2 percent year-on-year and 26.9 percent month-on-month, according to the Passenger Association. From January to May, 1.712 million new energy passenger vehicles were sold in China, up 119.5% year on year. In May, the domestic retail penetration rate of new energy vehicles was 26.6%, 15 percentage points higher than the 11.6% penetration rate in May 2021. Although the proportion of new energy is low, the auto industry is in the recovery period at present. The continuous upward trend of production and sales can reflect the changes in the demand side to some extent. However, considering the proportion of volume, it still feels like a drop in the bucket.

As for the downstream of rebar, the real estate industry, although the policy end continues to make efforts, but some areas are still affected by the epidemic, the progress of the resumption of work is slow, coupled with the large financial pressure, the overall demand end change is not obvious. At the same time, we also need to consider the impact of high temperature and rainy weather on the construction.

At present, the price of the cost side is relatively strong, and coke starts to pull up, providing strong short-term support to the cost side. However, there are no obvious signs of production reduction in steel mills. According to the market, taking Tangshan billet as an example, with the release of seals around the market, the quantity of billet market continues to increase, while the demand of downstream billet rolling mills is general, and the overall supply pressure is large. Other varieties are basically similar, so oversupply is more obvious.

Temporary large range of views unchanged, rebar high reference near 4850, if not an effective breakthrough, continue to see the price shock down. However, considering that the mentality of traders has not been completely changed, for the time being, we still look at the trend of shocks and pay close attention to the operation of 4750-4850 range in the short term. Pay attention to the mood and demand side of the change, once the mood turns, as risk release.


Post time: Jun-10-2022