Experts say the city - December 9

My Steel:In terms of supply, last Friday, the supply of the five major steel varieties was 8.6124 million tons, a decrease of 0.026 million tons week-on-week, with a decline rate of 0.04%. The production of the five major steel varieties, except for rebar and wire rod, increased week-on-week. In terms of inventory, the total inventory of the five major steel varieties last Friday was 11.601 million tons, a decrease of 0.1337 million tons week-on-week, with a decline rate of 1.14%. The total inventory of the five major varieties showed a decline week-on-week: the inventory of the five major steel mills decreased week-on-week except for medium and heavy plates, with rebar and wire rod showing a more significant decline. The social inventory of the five major varieties also decreased week-on-week, with the decline in cold-rolled sheets being the most significant. In terms of consumption, the weekly consumption of the five major varieties last Friday was 8.7461 million tons, a decrease of 0.3% month-on-month; among them, the consumption of construction materials decreased by 0.5% month-on-month, and the consumption of plates decreased by 0.2% month-on-month. The apparent consumption of the five major varieties showed a slight decline last week. Funds continue to play a game, putting pressure on the market. Although the focus of steel supply and demand has shifted downwards, the fundamental contradictions in steel itself are not prominent. Last week, the inventory of various varieties was reduced to varying degrees. As the delivery month approaches, the fluctuations in rebar and hot-rolled coils have intensified, but prices have not broken out of the oscillating structure. Although important macro events such as the economic work conference have not yet materialized, and the probability of the Federal Reserve cutting interest rates in December has increased, the overall decline may be limited. However, there are currently some funds rushing to exit, which has a significant impact on spot prices. It is expected that prices will continue to oscillate before the conference, and attention should be paid to the statements made during the conference.

Steel Home:Last week, the domestic steel market prices generally rose first and then fell. Looking at the later market, the operating rates of blast furnaces and electric furnaces continued to decline slightly, leading to a decrease in supply. The adjustment of production structure in steel mills has resulted in a reduction in the output of construction steel, and the rate of inventory decline has accelerated. The demand for plates is relatively high, but the production in steel mills is basically normal, resulting in a basic balance between supply and demand. Recently, steel costs have remained relatively stable, coupled with the demand for year-end rush work, it is expected that the domestic steel market prices will mainly operate with a strong oscillation this week.

Langge:With the accelerated implementation of stock policies and a package of incremental policies, signs of economic recovery at the bottom are becoming more apparent. The effect of incremental policies on boosting corporate confidence is strengthening, but the overall imbalance of supply exceeding demand is still developing. Insufficient demand remains a prominent constraint on enterprises, and it is necessary to further strengthen the effectiveness of incremental policies, especially to enhance the effective drive of government public product investment on corporate orders, and to accelerate the consolidation and enhancement of the economic recovery momentum at the bottom. The upcoming economic work conference may once again bring strong policy expectations to the market. From the perspective of black futures, the main rebar contract closed at 3311, down 59 points for the day and down 7 points for the week; the weekly settlement price was 3325, up 16 points; current positions are 1.334 million lots, an increase of 218,000 lots compared to last Friday, with a significant acceleration in positions last week, and the main contract has taken the lead in rolling over to the next month. From a technical perspective, the 05 contract hit a new low in three weeks, approaching the low point of November 18 at 3308. This week, attention should be paid to the game around the 3300 point mark. If policies do not meet expectations, it may drop towards around 3320. If policies are positively biased, the 3300 point may stabilize and continue to oscillate. From the perspective of the steel spot market, on the supply side: due to the impact of profit and loss among varieties, the intensity of capacity release has weakened, and pig iron output continues to decline, while the output of various varieties shows mixed performance. On the demand side: although seasonal weather affects the release of terminal demand, the market transactions have risen again due to the emergence of winter storage speculation. On the cost side: due to slight fluctuations in iron ore prices, small oscillations in scrap steel prices, and stable coking coal prices, the production cost support remains resilient. Therefore, the Langge Steel Research Center expects that from December 9 to December 13, 2024, the domestic steel market may continue to be weak amidst oscillation, influenced by enhanced expectations from the economic conference, weakened supply fluctuations from steel mills, deepening off-season effects, increasing winter storage speculation, and resilient cost support.

Tang Song:Entering the "Major Snow" season, it is a significant transition period for the national seasons. Most areas in the north have entered severe winter, while most areas in the south have completed the autumn-winter transition. Construction projects in the north are in the finishing or wrapping-up stage, and there has been an increase in rainy weather in the south, leading to a noticeable weakening in the demand for construction steel. It is expected that the Political Bureau and the economic work industry will hold meetings this week, and major policy announcements are still worth looking forward to. Macroeconomic policies may still support market trends, and the degree of policy dominance in the market may rise again; positive policy expectations may boost winter storage market transactions. However, as the off-season demand weakens, the wait-and-see sentiment in the domestic futures market is growing, making it difficult for speculative trading and trade demand to increase; end users maintain demand-based procurement, and terminal demand is weakening; overall steel demand is stabilizing but trending weaker. On the supply side, as some steel companies' profits narrow, the operating rate of long-process production lines may not increase; the operating rate of short-process production lines fluctuates slightly; as the long-process rebar and coil capacity gradually transforms, the growth of coil output slows down, while rebar output continues to decline slightly. There has been a slight increase in maintenance of steel production lines in some inland areas; the supply of steel resources remains basically stable, with some varieties and regional resource allocations possibly adjusted, and the resources for winter storage and northern materials moving south are gradually increasing. The market is generally in a state of "slightly weak supply and demand." The social inventory of steel has entered a slight upward phase, with varying degrees of inventory increases in regional and key varieties. Recently, the market's policy expectations for the two meetings have basically been reflected, and the degree of policy disturbance to the market this week may be lower than expected. In addition, the recent limited increase in supply and the not obvious decrease in demand, along with low inventories of key steel varieties, indicate that the supply-demand contradiction has not yet manifested, and the intensification of supply-demand contradictions will still require time to accumulate. Overall, the important meetings held this week, along with the expected warming of some economic indicators and the lack of significant fundamental contradictions, still provide support for the market. It is expected that the black futures market may oscillate and adjust this week. The focus for rebar futures in January is on the adjustment range of 3220-3330, while for May, it is on the adjustment range of 3280-3390.

Youfa Group Han Weidong:Since entering November, the market has continued to experience a demand off-season that is not weak, with both month-on-month and year-on-year growth, and inventory has continued to decline, reaching a relatively low level. The fundamentals are quite good, and macro expectations are also quite positive, yet prices are not rising! Moreover, even the previously strong raw materials are showing weakness, reflecting the current industry's pessimistic sentiment and forming a resonance! This negative sentiment may affect the market trend before the Spring Festival. This week, the market is likely to begin entering a state of inventory accumulation, so let's patiently wait for the arrival of winter storage prices. If that happens, it could still be a small opportunity. All the good news cannot outweigh low prices!