The hottest thread soared upward breakthrough why

2022-09-21
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Why is the steel price more controlled and crazier when the thread soars upward

in the futures market in the first half of the year, the futures varieties of black rebar and iron ore can be said to be in the limelight. Both in terms of trading volume and turnover, they ranked first and second in all varieties, and their positions ranked first in the industry. On July 11, the October rebar contract on the Shanghai Futures Exchange rose 2.6% to 3531 yuan/ton, which was the third consecutive day of gains, and was bound to hit the highest closing level since mid March

since the second quarter of this year, rebar futures have successively stepped out of the V-shaped reversal market, rising from 2775 yuan/ton on April 20 this year to 3385 yuan/ton on May 22, and then rapidly fell to 2906 yuan/ton, reaching a stage high of 3474 yuan/ton on July 5. The operation characteristics of rebar futures in the second quarter are large fluctuation range, fast fluctuation speed and many participating funds

since July, the main 1710 contract of rebar futures has oscillated in a wide range of 3000-3480 yuan/ton. However, while the long and short sides of the market are arguing endlessly, on July 11, with the sharp rise of most varieties in the early trading of commodities, the strong rise of black series varieties, the double focus led the rise of commodity futures, and rebar stood at 3500, a new high of nearly four years since February 2014, up more than 2%

market bulls believe that it is the gradual relaxation of the liquidity environment since the end of June that has led to the rise in raw material prices, which makes rebar futures the hottest commodity in speculative trading

the short side believes that the market focus has shifted from the macro side to the supply and demand side. When the "ground bar" cleaning up and rectification has entered the final stage and the steel inventory has reached an inflection point, the high profits of the steel plant are difficult to maintain, and the steel price may turn down again

moderate liquidity of the central bank has attracted attention

as of May, the completed amount of real estate development investment has increased by 8.8% year-on-year, with a growth rate of 7% in the same period last year and only 5.1% in the same period in 2015. Real estate investment, which is significantly better than expected, has boosted steel demand. Industrial production continued to rebound in June, with manufacturing PMI rebounding to 51.7, just slightly lower than the four-year high hit in March, such as PVC and more special plastics. In May, the year-on-year growth rate of profits of Industrial Enterprises above designated size increased from 14% last month to 16.7%

with the macro-economic data in June to be released this week, all parties predict that the economic data in the second quarter will remain stable, and the economy will continue to develop stably in the third quarter. At the same time, the "central bank" announced on the 10th that the current liquidity of the banking system is at a moderate level after hedging the payment of government bond issuance and the maturity of the central bank's reverse repo, and there will be no open "market" operation on Monday

30billion reverse repos expired on the same day, with a net withdrawal of 30billion; This week, 280 billion reverse repos and 179.5 billion mlfs expired in the central bank's open market. Since then, the central bank has suspended open market operations for 12 consecutive trading days. Industry experts said that in view of the market conditions, the central bank may restart the reverse repo operation this week. Since July, there has been no shortage of funds in the market. It is easy to borrow money

in this regard, senior analyst duhongfeng said that due to the price trend of rebar futures, it is extremely related to market liquidity. Therefore, the record high of rebar futures on July 11 is the result of the resonance between capital and supply and demand fundamentals. As of July 10, although the central bank suspended reverse repo operations for 12 consecutive trading days, the funding side was relatively loose

due to the sufficient supply of funds in each period, the interest rates of various types of funds went down all the way. The data showed that the weighted interest rate of one-day inter-bank pledge repo fell to 2.55% from 2.92% of the annual consumption of plastic raw materials of nearly 6million tons at the end of June, and the seven day varieties fell to 2.93% from around 3.76% at the end of June. Shibor (Shanghai interbank offered rate) also declined. The inter-bank certificate of deposit interest rate also fell for three consecutive weeks, reaching 60BP from the peak in early June. This means that the capital is loose, the market asset trend has also collectively warmed up, and commodity futures prices have risen

in addition, after the rebar futures price hit a new high, some people in the industry questioned whether it would attract more funds to enter? It is understood that at present, there is a high enthusiasm to go long in the market. The main strong varieties are rebar and coke, and the capital also continues to flow in. Among them, the precipitation of rebar funds reached a record level

from the change of funds from May 31 to June 10, the net inflow of coke funds was 2.4 billion yuan, with a change range of 74.9%, and the net inflow of rebar funds was 3.08 billion yuan, with a change range of 21.8%. The capital increase of coal sector is relatively large

industry focus: why is the steel price rising more and more under control

since 2017, steel prices have kept hitting new highs, and the spot and futures market prices of steel have jumped sharply after the Spring Festival. However, some market analysts said that since the second quarter, although steel prices have continued to rise, the fundamentals have not changed from the demand side. Fearing that steel prices would repeat the mistakes of soaring coal prices, five departments, including the national development and Reform Commission, the Ministry of industry and information technology and the China Securities Regulatory Commission, issued the notice on further implementing the policy of maintaining pressure and promoting the balanced operation of the steel market on February 15 to stabilize the market, but steel prices continued to rise

so what is the reason that the more controlled the steel price, the higher it rises

some industry insiders believe that this is based on the release expectation of the de capacity policy and stable growth projects. Secondly, the further strengthening of environmental protection supervision, coupled with the hype of financial capital using de capacity, 4 The strength of backbone enterprises has been significantly enhanced, which has helped the rise of steel prices

in addition to the loose liquidity factor of the central bank, senior analyst duhongfeng said that at present, the supply of coke in the spot market is tight, and the capacity utilization rate of coke enterprises in Shandong region has decreased due to the impact of environmental protection. After Shandong Rizhao steel and Laigang Yongfeng, the leading steel mills in Shandong, raised the coke purchase price by 50 yuan/ton on July 10, Hebei Hegang group's coke purchase price also increased by 50 yuan/ton today. The second round of rise in the coke market is in full swing. Coke futures of financial derivatives rose synchronously and led the black series to resonate

in addition, just after the rebar futures price broke through the 3500 yuan mark, rumors were everywhere in the industry, and all major industry exchange groups were exploring the reasons for the rebar price rise

some insiders asked the author whether the electric arc furnace was restricted, resulting in the reduction of steel market supply? Duhongfeng, a senior analyst of the institution, said that as for the electric arc furnace, the original shutdown is allowed to resume production, and the new one needs to be replaced according to the production capacity

from the perspective of steel supply, the data of the Bureau of statistics shows that China's steel output increased by 0.8% year-on-year in January, which is an increase. However, structurally, the output of construction steel decreased, with a year-on-year decrease of 0.9%; Wire rod (wire rod) decreased by 4.8% year-on-year

and today's crazy Chi Jingdong's explanation of doubts has also been widely interpreted by the market:

recently, Chi Jingdong, a member of the national inter ministerial joint meeting to reduce production capacity, a core think tank for the supply side reform of the national steel industry, and vice president of the China Iron and Steel Association, gave a clear answer to the policy of changing the medium frequency furnace to the electric arc furnace

1. At present, the country has not relaxed the policy conditions of changing "medium" to "electricity". The market's more than 20 million tons of new capacity of electric arc furnace is just a legend in the market.

2. Not allowing electric arc furnace to replace medium frequency furnace is an important principle for iron and steel to reduce production capacity and eliminate "ground bar steel". At present, the state does not allow the electric arc furnace to replace the medium frequency furnace. If there is a change from "medium" to "electricity", it is illegal and will never be allowed

3. For enterprises that originally had the capacity index of electric arc furnace, but did not build electric arc furnace, but built medium frequency furnace and had been produced, it is not allowed to build electric arc furnace after dismantling the medium frequency furnace

4. For enterprises that originally had the capacity index of electric arc furnace, and had built electric arc furnace equipment, the electric arc furnace was in the shutdown state in the early stage, and then built medium frequency furnace production, after the complete dismantling of the medium frequency furnace, after the verification, accounting and approval of the local government, Allow the electric arc furnace to resume production

5. For enterprises that already have the capacity index of electric arc furnace and have built electric arc furnace equipment, and are now preparing to update, transform and upgrade the equipment of electric arc furnace due to backward and aging equipment, they are allowed to carry out equipment transformation and electric arc furnace production without increasing the capacity after verification by the government

6. It was originally a medium frequency furnace steelmaking enterprise with complete continuous casting, steel rolling and other process equipment. The provincial government will allow the use of existing equipment such as continuous casting and steel rolling to build new electric arc furnaces after replacing other, formal and legal production capacity. The eliminated capacity that must be replaced by the same capacity

then, is it because the number of steel mills shut down for maintenance increased slightly in July, which also has an impact on the futures price of rebar

it is understood that the maintenance of the steel plant is normal at present. According to the survey of 154 domestic steel mills conducted by the agency, as of July 7, the domestic blast furnace operating rate by volume was 89.35%, down 0.18 percentage points from the previous survey

from the perspective of major regions, in terms of production capacity, the blast furnace operating rate in North China was 90.84%, up 0.74 percentage points; The blast furnace operating rate in East China was 84.74%, down 1.75 percentage points, while the decline in East China was mainly due to the planned shutdown of blast furnace steel at Jigang, with little change in other regions in China. To say that the action is fast, or the action of the steel plant is fast

the marketing center of Baosteel Co., Ltd. announced that after research and decision, the domestic sales price of Baosteel's plates in August 2017 will be increased on the basis of the price in July, and the leading products such as medium and heavy plate, hot rolling, cold rolling and pickling will rise by yuan/ton respectively. Hot dip galvanizing: Baoshan, Dongshan CQ mild steel, s series structural steel, BJD series, hot-rolled pickling galvanizing increased by 150 yuan/ton, and others increased by 100 yuan/ton. Meishan: the base price is increased by 150 yuan/ton. For galvanizing: the price of CQ grade mild steel is increased by 150 yuan/ton, and the price of others is increased by 100 yuan/ton. In terms of aluminum and zinc plating: (Baoshan and Meishan) the base price was increased by 150 yuan/ton. Today's 11th coincides with the price adjustment of Shagang, with a high probability of rise

in fact, at the beginning of this round of steel price rise, there were rumors in the market in mid June that the price rise was caused by long rebar in Yong'an heavy warehouse. When it was an inquiry about the spot, it was also learned that the spot price was still weak and the demand was sluggish. But now, with the rebar price hitting a new high, should downstream traders change their thinking. At present, according to the author's understanding, the market attention has shifted back to steel supply and demand

according to the statistics of China Steel Association, the estimated daily output of crude steel in China in mid June was 2.3528 million tons, a decrease of 6100 tons or 0.26% month on month in ten days; As of the end of mid June, the steel inventory of member enterprises was 13.2975 million tons, with a month on month increase of 574100 tons, an increase of 4.51%. After nearly two months of continuous decline, the steel plant inventory needs to change oil once every six months. At the same time, after several months of continuous decline, the social inventory of rebar turned from decline to rise last week, marking the weakening of steel demand

however, the continued decline in some trade and steel mill end inventory indicates that end demand is still relatively strong. Considering that the supply of long process steel mills has almost peaked, short process steel mills can become a climate in the short term. Therefore, it believes that steel prices are still in an upward trend. Insiders pointed out that although there are still factors supporting the current price of rebar at present, due to the large increase accumulated in the early market, it is necessary to prevent possible market correction, and the short-term rebar futures will probably maintain a volatile trend

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