2025-01-15
Steel prices rebound due to these supporting factors.
Market Review
Today's steel prices continued to rebound. By the close, the main rebar contract for May settled at 3283, up 48 points from the previous trading day; the main hot-rolled coil contract for May settled at 3409, up 65 points; the main coking coal contract settled at 1730.5, up 15.5 points; the main coking coal contract settled at 1129.5, up 22.5 points; the main iron ore contract settled at 783, up 17 points. As of 16:00 on the 13th, regarding finished products, the average spot price of rebar on Lange Steel Network was 3402 yuan, up 13 yuan from the previous trading day; the average price of hot-rolled coil was 3388 yuan, up 19 yuan from the previous trading day. In terms of raw materials, the imported PB powder price at Jing Tang Port was 800 yuan, up 10 yuan from the previous trading day; the price of first-grade metallurgical coke in Tangshan was 1560 yuan, unchanged from the previous trading day; the ex-factory price of steel billets from leading steel mills in Qian'an, Tangshan was 3000 yuan, up 30 yuan from the previous trading day.
Market Analysis
The black series continues to rebound, with the pace not losing to the previous decline. The main rebar contract has recovered the losses from the previous five days before January 10 in just two days. From the spot market perspective, the best-performing products are the steel strip and hot-rolled products, with price increases reaching 40 yuan in multiple regions. Most rebar and cold-rolled varieties increased by 10-20 yuan, and some other varieties have also started to report price increases in certain markets. Although the overall increase in transactions is limited, after the basis in some markets widened, the collection situation for futures and spot companies has improved, and some end-users have increased their inventory.
The clear rebound in the market is mainly due to several changes:
First, the pessimistic atmosphere after the New Year has improved, and the trading logic has changed. Previously, the core external factor for market trading was Trump's aggressive tariff policy, while the internal factor was the weakening of market sentiment during the policy gap, leading to a decline in major assets. However, in the past two days, it has been reported that Trump's economic team is discussing gradually increasing tariffs month by month instead of aggressively raising them, which has led to a decline in the dollar index and an increase in non-dollar currencies. Additionally, the central bank and the foreign exchange management bureau have continuously released significant signals, firmly maintaining the exchange rate, which has also had a certain positive effect. The rise in international crude oil and natural gas prices has boosted energy and non-ferrous prices globally, creating a certain rebound environment for black commodities.
Second, the factor of the Spring Festival also has a certain impact. As the year-end approaches, the circulation volume in the spot market is decreasing, and most traders have no inventory and have not engaged in winter storage. In the absence of goods in most steel trading hands, there is no point in driving prices down, and steel mills have a relatively firm price stance, with winter storage prices being relatively high, not offering prices below the market price, and even above the market price. The downward pressure is mainly from macro capital on the market; once the macro sentiment stabilizes, the motivation for capital to drive prices down will also weaken. In this case, to a certain extent, the emergence of some positive news can easily stop the decline and trigger a rebound.
Third, there is still no pressure on the fundamentals. Even if the market expects an accumulation after the holiday, it is still difficult to exceed the same period last year. Since the fourth quarter of last year, we have seen supply actively adjusting to follow demand, especially in the structural adjustment of long products and plates. Moreover, after mid-January, electric furnaces have generally stopped production, and with full exports, supply pressure has not been overly prominent.
In summary, the market has a certain basis for rebound, and the rebound has not completely ended. It is not advisable to short the market in the short term.
Market Outlook
From the current market operation status, the market has experienced a rapid rebound over the past two days, reversing the previous pessimistic downward trend. However, from the perspective of the rebound's momentum, it is partly due to Trump's change in attitude towards tariff increases and the impact of the dollar index on bulk commodities, and partly due to the overall improvement in the macro atmosphere, with the stock market, commodities, and black series resonating upwards. The rhythm of the rebound is still ongoing, and if the momentum is sufficient, there is still room for further upward movement.
From the market perspective, the black series overall closed higher, with the main contracts for iron ore and coking coal rising over 2%, hot-rolled coil rising 1.94%, and rebar rising nearly 1.5%, not worse than the previous day's increase. Specifically, the main rebar contract settled at 3283, up 48, with an open interest of 1.74 million contracts, a decrease of 19,000 contracts. Among the top 20 positions, long positions increased by over 800 contracts, while short positions decreased by 12,600 contracts. After Guotai Junan significantly reduced its short positions yesterday, today CITIC reduced its short positions by 18,800 contracts. On the daily chart, after two days of increase, a "double needle bottom" structure has formed, and the hourly level "V"-shaped rebound momentum is relatively strong, making it possible to continue to challenge the 3300 mark after a slight adjustment.
Experts say the market - January 20
2025-01-20
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