Steel prices fall irresistibly

Rebar ** main contract on Wednesday opened 1201 to 4602 (yuan, the same below) opening, the highest test 4650, the lowest test 4598, to close at 4633, up 30 or 0.65%, volume 514,054 hands, positions 555,024 hands , Hand positions decreased by 32,778. Steel prices retreated in the 4600 level early Wednesday morning. Although the 4600 mark was broken in the session, the A-share market made a rebound in steel prices, breaking the recent mini-heads 4620, 4640 and stagnating at the 4650 level. Afterwards, the bulls wished to go up again and 4650 failed to make a decisive move. They ended at 4633 and left the 4620-4585 area in the short-term weak zone. Although the steel price trend remained unchanged, they indicated that the end of the period of accelerated steel price decline, and the market price of steel needed technical correction. Corresponding indicators, waiting for the direction of the new direction of the market, the author believes that if the steel price is unable to break through 4680, it still does not rule out the possibility of a new low, and the decline in steel prices will continue.

In the same way that the domestic stock market soared, the commodities ** market reported gains, and the closing rallied. Among them, coke, rubber, zinc-aluminum, and rebar are the most eye-catching; Shanghai copper has no performance today, and the increase is less than 0.2% throughout the day. As a whole, the current prices of various commodities are still at the bottom of this wave of decline, and they have not escaped the downward trend. Today's rebound is only due to the rebound of A-shares. The market still cannot give sufficient reasons for the rise of commodities.

In terms of spot, the data shows that: In the morning of the 21st, the domestic building materials spot market prices continued to move toward low levels, with the drop mostly at 10-30 yuan/ton. The three-tier large screw in the Shanghai market fell 10 yuan/ton, and the Beijing market dropped by 20 yuan/ton. In the hot-rolled market, once there was a market rumors that the 4580 resources in Shanghai were hot, some merchants were reluctant to sell, and their minds were stable. However, after the midday, the market still showed signs of killing and shipping, and the spot resource that had once rebounded to 4,600 soon fell. Broken, 4590 resources did not have a good deal. Market confidence is still insufficient, and bearish sentiment is still spreading.

In terms of raw materials, Mysteel's import ore price index was flat, and the current 63.5/63% print index remained at 187; the spot price of import mines was weak; the ocean freight fee, the Baltic Index (BDI) stopped falling; Tangshan billet ex-factory price was stable, and transactions were average; The price of iron powder fell steadily, and the volume of transactions was light; the scrap market was weaker and steady, and transactions were improving; billet prices were weak and stable.

Shagang introduced the policy on construction steel prices in late September. Based on the price of steel mills in mid-September, Shagang reduced the rebar, wire rod and coil by RMB 60/t, RMB 70/t and RMB 120/t respectively. After adjustment, the price of HRB33516-20mm rebar is 4,800 yuan/ton, and the ex-factory price of Ф6.5mmQ235 plain carbon steel is 4,950 yuan/ton. The price reduction is basically in line with the previous market expectations. Whether it can boost the price reduction before the 11th round of steel mills is worthy of attention.

In addition, in the IMF's global economic outlook report, the global economic growth forecast for the next two years will be lowered by 0.3% and 0.5%, respectively, both to 4%. The IMF pointed out that the U.S. economic activities may suffer more attacks. It is expected that U.S. economy will only grow by 1.5% this year. The delay in the recovery after Japan’s strong earthquake and the European debt crisis all suffered from the IMF’s “poor student” warning.

Returning to China on the 20th, the China Iron and Steel Association, together with the China Minmetals Chemicals Import and Export Chamber of Commerce and the China Metallurgical and Mining Enterprises Association, officially launched the China Iron Ore Price Index. The index will be publicly released on a weekly basis starting from October this year.

Zhou Wangjun, deputy director of the price division of the National Development and Reform Commission pointed out that the establishment of iron ore price index is conducive to guiding the formation of domestic and foreign iron ore expected prices, to guide steel production development and reduce costs, and help to break the international iron ore giant monopoly market Pattern. This is a big positive for steel spot trading, and it also shows that China is a big iron ore consumption country and it is a gesture of fighting for pricing power. The author is optimistic.

In the early morning when the Fed’s interest-rate member resolutions will be announced, the European debt crisis will be overcast and the financial market will be volatile. The actions of the Fed will be the focus of the market. At present, the market has expected that the Fed will not introduce QE3 other than continuing to maintain ultra-low interest rates. Instead, it will buy long-term Treasury bonds by selling short-term Treasuries held on hand, which is called “reversing operations” to depress long-term interest rates. Encourage business investment and stimulate the economy.

From the perspective of the effectiveness of monetary policy, the purpose of monetary quantitative easing policy is to lower the market interest rate. Now that the interest rate has been at an ultra-low level, the yield on 10-year Treasury bonds has also dropped below two percent, and monetary quantitative easing has been imposed again, resulting in limited policy results. Coupled with the fact that the current core inflation rate has risen above the target limit of 2%, it has indeed restricted the Fed's ability to invest more money in space. Therefore, without expanding the scale of the balance sheet, it is clearer to extend the duration of bonds held, sell short-term government bonds, buy long-term government bonds, reverse the yield curve of government bonds, and push down the medium and long-term interest rates to stimulate the economy. Market-based “reversing operations” have been fully anticipated. If the outcome of the interest rate negotiations is consistent with this, it is believed that it will be difficult to change the market’s biased outlook on the US economic outlook.

Since September 8, the steel price has fallen for 8 consecutive trading days, there has not been a decent rebound, showing weakness, the decline rate has reached 253, RSI and other technical indicators have bottomed out, but also left the 5-day moving average 4668 As the demand for brewing technology rebounded, A-shares rebounded and stabilized today, but the steel market itself did not have much positive news to boost. The future direction of the market will start around the 4650-4680 rebound resistance zone, and the support below will also appear at 4600-4585, which will stand at 4680. After the short-term decline, the steel price will resume range volatility and return to the nature of supply and demand. If it falls below 4585, Steel prices will go straight to the 4560-4520 area. I believe that the possibility of the latter is still greater than the former. The current downtrend, the author suggests that the direction of the transaction should still take the initiative, mainly in the high position.