2025-01-09
Coke's sixth round of price cuts has been implemented, and the steel market's focus continues to shift downward.
Market Review
Today, steel prices continued to decline, with the focus of futures steel prices moving downwards. By the close, the main rebar contract 05 settled at 3211, down 37 points from the previous trading day; the main hot-rolled coil contract 05 settled at 3321, down 33 points; the main coking coal contract settled at 1690, down 45.5 points; the main coke contract settled at 1103, down 40.5 points; the main iron ore contract settled at 747.5, down 5.5 points. As of 16:00 on the 8th, regarding finished products, the average spot price of rebar on Lange Steel Network was 3402 yuan, down 10 yuan from the previous trading day; the average price of hot-rolled coil was 3374 yuan, down 20 yuan from the previous trading day. In terms of raw materials, the imported PB powder price at Jing Tang Port was 775 yuan, up 5 yuan from the previous trading day; the price of first-grade metallurgical coke in Tangshan was 1560 yuan, down 50 yuan from the previous trading day; the ex-factory price of steel billets from leading steel mills in Qian'an, Tangshan was 2970 yuan, unchanged from the previous trading day.
Market Analysis
Today, steel prices continued to fall, with an overall decline mostly between 10-30 yuan. Some spot markets accumulated a certain amount of pessimism and began to lower prices for sales, with a worse willingness to accept goods, and selling pressure greater than buying demand. On the market, rebar and hot-rolled coil hit new lows, with rebar approaching the 3200 mark and hot-rolled coil approaching the 3100 mark.
The market's operating conditions today remain poor, with the price focus continuing to move downwards. Rebar has again significantly increased its position pressure, and market confidence is very weak. Although there was a certain rebound in black metals following the stock index in the afternoon, the strength was much weaker than that of the stock index, and the rebound did not last long before returning to a downward trend. Even though there is quick entry of bottom-fishing funds in the stock market, the black metals are still predominantly short positions. The funds entering the rebar main contract during the day reached 247 million, with a cumulative increase of nearly 300,000 contracts since the New Year. This indicates that the force of short selling in this round after the New Year is still relatively strong. With the increase in iron ore shipments in December, the total amount of iron ore arriving in China in December has significantly increased both month-on-month and year-on-year. Currently, after iron ore has fallen below the 100 USD mark, signs of fatigue are evident, coupled with the implementation of the sixth round of price reductions for coke, leading to a continued downward trend in raw material and finished product prices.
The fragility of the black market is not only reflected in its "indifference" to the rebound of the stock index but also in the current situation of "weak market, weaker black metals." For this "opening black" situation, the market is gradually losing confidence, but it is necessary to sort out the current market situation. It is not that the space for price decline is small that one can bottom-fish; at least technically, there has not yet been a stop-loss signal. Nor is it that prices being low means a bottom has already been formed. One must see the main logic of the short-term decline and the international background of market risk changes after the New Year, as well as the weak reality based on no winter storage, low inventory, low prices, and low valuations. The significance of a large number of traders having no goods and extreme price cuts is not great, nor can it stimulate demand. Starting the year with very low expectations is not necessarily a bad thing; the market has accumulated negative sentiment for a long time, and the time for post-New Year games is extended. Before the New Year, there was concern that the space would not be sufficient, but once it is sufficient, it will definitely provide greater volatility space after the New Year.
Market Outlook
Currently, the pessimistic sentiment in the steel market is growing, and the downward trend has not completely stopped. In the short term, it cannot be ruled out that after a large amount of short funds enter the market, there will be continued technical pressure, leading to a certain downward space in the spot market. However, it should also be considered that the liquidity of the spot market is restricted by the factors of the Spring Festival holiday, which will cause the speculative nature of the market to become stronger. Currently, there is some selling pressure in the market, but with both futures and spot weakening, the basis has not effectively widened, nor is there operational space. It is expected that after the January contract delivery is completed and around Trump's inauguration on the 20th, a turning point in the phase of the downward trend may occur.
From the market perspective, the black series overall closed lower, with coking coal leading the decline at over 3.5%. The main rebar contract 05 closed at 3211, down 37, with an open interest of 1.84 million contracts, an increase of over 70,000 contracts. Among the top 20 positions, long positions increased by 18,000 contracts, while short positions increased by 46,000 contracts, with CITIC increasing short positions by 27,579 contracts. Shorts still dominate, and technically, the rhythm is controlled by shorts, with layers of downward pressure, and intraday rebounds are weak. The next step may continue to test the 3200 mark, with the operational space moving down to 3180-3265.
Experts say the market - January 20
2025-01-20
Hotline:4000-91-9898
Copyright © 2024 Tianjin Youfa Steel Pipe Group Co., Ltd.
State Internet Information Office Reporting Center Tianjin Internet Illegal and Bad Information Reporting Center Reporting E-mail:yfmarket@yfgg.com
National Hotline:4000-91-9898
Copyright © 2024
Tianjin Youfa Steel Pipe Group Co., Ltd. All Rights Reserved
National Internet Information Office Reporting Center
Tianjin Internet Illegal and Bad Information Reporting Center
Reporting E-mail:ppclglzx@aimatech.com