Market analysis
The steel market is generally stable and rising today. Threads and hot coils have increased by 10-20 yuan in many places. Threads are slightly stronger than hot coils, and the increase in some markets has reached 40 yuan. Other steel types also rose more or less, with transaction volume better than yesterday, and futures and spot trading relatively active.
The market continues to rise today, mainly due to three factors:
On the one hand, it is driven by the rise in the stock market, and macroeconomic conditions continue to be positive. In addition to the positive impact of national debt, the industry believes that the central bank is expected to lower the reserve requirement ratio later. For the superimposed issuance of additional treasury bonds and local government special refinancing bonds, according to the arrangements in the government work report at the beginning of the year and the quota of this additional issuance of treasury bonds, it is expected that the net financing of government bonds will increase by about 1.5 trillion yuan year-on-year in the fourth quarter of this year. In addition to regular open market operations, the probability of the central bank lowering the deposit reserve ratio of financial institutions has increased. This also means that proactive fiscal policy coupled with further monetary easing policy will protect the economy in the fourth quarter and even next year. Today, the Bureau of Statistics released industrial added value data. Although from January to September, the national industrial enterprises above designated size achieved a total profit of 5.41199 billion yuan, a year-on-year decrease of 9.0%. However, looking at September data alone, profits of industrial enterprises above designated size increased by 11.9% year-on-year in September. This was also the second consecutive month of growth since August. In September, China’s industrial output maintained a growth rate of 4.5%, higher than market expectations. At the same time, there are signs of further improvement in the profit growth rates of the state-owned sector and private enterprises, and even the private sector has turned positive. This is conducive to industrial enterprises replenishing their inventories. In the relatively low inventory structure of industrial products, it has a good driving effect on increasing black prices.
The second aspect is that the strength of raw materials continues to play a role. This not only reflects the strong fundamentals of raw material supply and demand mismatch, but also reflects the advantages of upstream in the industrial chain. Since the third quarter, coal mine accidents have occurred frequently in Shanxi. Therefore, the main production areas have always been under high-pressure safety inspections. Coking coal production has declined significantly, and prices have also been rising. Although some coal mines have resumed work and production after the holidays, the supply of coking coal has gradually recovered, and the tight supply situation has been alleviated to a certain extent; even now, the price of coking coal has dropped by 50-150 yuan cumulatively from the high point in the month. However, as we get closer to the end of the year, some large domestic mines will gradually reduce production in order to complete their annual production tasks. With the shutdown of 4.3 coke ovens, the energy demand situation in winter will have a considerable impact on coke supply in the short term. There is still great support for coke prices. In addition, iron ore has high elasticity and has been operating at a high level. This time, Dalian Commodity Exchange has actively taken action. If it reaches new highs, we need to pay attention to the intensity of policy regulation.
The third aspect is the disturbance of overseas macro and uncertain factors. The war in the Middle East has not ended, and there has been a new war between India and Pakistan, a war in northern Myanmar, and the dilemma in the Middle East, which has caused the prices of crude oil and gold and precious metals to stop falling and rise again. However, U.S. economic growth hit a new high in the past two years in the third quarter. Initial estimates released by the U.S. Department of Commerce show that U.S. real gross domestic product (GDP) increased by 4.9% on an annual basis in the third quarter, exceeding market expectations and hitting the fastest growth rate in the past two years. The Federal Reserve did not give a very clear expected trend in terms of monetary policy, but it did not rule out the possibility of raising interest rates again.
Generally speaking, the black market continues to rebound, and market expectations have reflected the macro trading logic. But the actual contradiction remains unresolved. We need to pay attention to the strength and rhythm of the rebound.
Market outlook
From the current point of view, the market has initially declined and then increased this week, and closed up again this Friday. Market confidence has been actively restored, and market transactions have generally improved, injecting new hope into the steel market that is about to enter the off-season, and the number of bullish voices in the market has gradually increased. . But looking forward, on the one hand, we still need to pay attention to the impact of policies and the improvement of the overall macro atmosphere on the operating environment of the steel market. On the other hand, fundamental contradictions are still difficult to alleviate, such as industry profits, upstream and downstream contradictions, and supply and demand relationships, which directly reflects In terms of changes in hot metal production and finished product inventories. In the short term, it is not ruled out that the market still has room to rise, but rhythm is still important. The situation has not yet reached a good situation, so be cautious in chasing the rise.
From the market point of view, black hit a new rebound high, “double focus”, iron ore overall rose by more than 2%, spiral coil rose by more than 1%. Thread closed at 3724, up 54, with 1.72 million positions held and 33,000 positions reduced. Among the top 20 positions, long positions decreased by more than 6,200 lots, short positions decreased by 21,000 lots, and CITIC Futures increased its long positions by nearly 18,000 lots. From the perspective of positions, the short positions are still active in reducing positions, and the bulls have not made many moves to increase their positions. If the bulls increase their positions in a large amount, the increase will be even greater. In terms of form, the hourly level pressure around 3715 has been broken, and the top is approaching the daily level pressure around 3750. Technically, the daily line and hourly line resonate upward. The rising market has not yet finished, but we need to pay attention to the rhythm. It is not recommended to pursue long positions. You can wait for the correction to stabilize before covering long positions.
