Looking back at the steel market in January, steel prices rose and fell in the first half of the year, adjusted in the middle of the year, and then slightly after the second half of the year. Among them, the rebar 2405 contract as a whole **332%, hot coil 2405 contract as a whole**265%, iron ore 2405 contract as a whole**189%, coke 2405 contract as a whole **584%。Looking forward to the steel market in February, affected by the Spring Festival holiday, the steel market will be in the stage of price and no market most of the time, the core logic of market trading is based on macro, supplemented by fundamentals, and it is expected that the steel will show a strong trend. Especially after the Spring Festival, driven by strong expectations, the probability of the center of gravity of steel prices moving up is relatively large.
From a fundamental point of view, the pre-holiday spot market has gradually turned into a situation of no market, and the speed of steel accumulation has accelerated, of which the thread social library has risen to a high level in the same period of nearly 5 years (lunar calendar), which has caused some pressure on steel. Whether the degree of accumulation will impact the post-holiday market, it is still necessary to pay attention to the production of steel mills and the resumption of work and production in the downstream after the holiday. However, considering the current large-scale losses of steel mills, the inventory pressure after the holiday may not be too large.
From the perspective of steel mills, in February, Baowu, Shougang, Anshan Iron and Steel, Benxi Iron and Steel, Shandong Iron and Steel and other large factories on hot-rolled ribbed steel bars, hot-rolled coils, plates, cold-rolled coils, coated coils and other varieties of order guidance prices to stabilize, a small number of categories increased by 100 yuan tons. On the whole, the reason for the stability of the steel mill's guide price is that in the off-season, the steel mill is mainly to ensure orders, in order to maintain the corresponding profits, and its guidance price in March is likely to be **, which will bring support to steel prices.
From the basis point of view, on the night of the 2nd**, the thread 2405 contract **3853, the basis is 67; Hot rolled 2405 contract**3988, basis -8; are well below historical averages. Due to the strong intention of leaving the market before the holiday, the thread and hot-rolled ** of the disk are in an undervalued state, with the influx of funds after the holiday, the repair of the basis is expected to be stronger, and the spot is expected to follow the first-class upward.
In terms of raw fuel, coke spot ** is expected to maintain stable operation, and the main focus is on iron ore. Due to the poor production enthusiasm of steel mills, the supply and demand pattern of iron ore has continued to weaken recently, and the high level of iron ore has fallen. At present, there are many iron ore inventories in steel mills, and if the downstream demand does not improve after the holiday, steel prices will be under pressure, which will then inhibit the pace of resumption of production of steel mills and drag down the demand for iron ore. If the raw fuel** does not perform well after the festival, it will drag down the steel**.
On the macro front, the pressure on the domestic economy to continue to improve still exists, and market confidence is insufficient. Before the holiday, the central bank will cut the reserve requirement ratio by 05 percentage points, providing long-term liquidity to the market of 1 trillion yuan; The PPI decline in January is expected to continue to narrow. After the Spring Festival, there will be two expectations in the market in the short term, one is the expectation of the release of good news from the two sessions, and the other is the expectation of a rebound in demand for construction steel. On the foreign macro front, the Fed's expectation of a rate cut in March has declined, and the first interest rate cut may be pushed to May, and commodities are collectively under pressure.
On the whole, the pre-holiday steel market is in the stage of price and no market, and it is expected that the overall volatility of steel prices will be limited, and it will be dominated by the operation of the range. After the holiday, the market looks forward to the favorable policies of the two sessions of the country and the rebound of the demand for construction steel in the "Golden Three Silver Four", if the spot demand can reach a normal level after the holiday, the center of gravity of steel is expected to further rise under the resonance of the future.
Information reference: **China Metallurgical News, Oriental Fortune, My Iron and Steel, etc.
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