The financial market has welcomed another policy wind, and the fiscal deficit ratio has increased to 4% ignited the enthusiasm for black trading, but whether demand can be fulfilled in the peak season of the "Golden September" is still the key to the direction of steel prices.
The futures market finally rebounded after continuous declines. On Friday, the main contract of rebar closed at 3,127 yuan/ton, up 26 yuan, an increase of 0.84%; the main contract of hot coil closed at 3,364 yuan, an increase of 22 yuan, an increase of 0.66%.
This rebound coincided with the press conference of the Ministry of Finance Lan Fo'an saying at the State Information Office that the fiscal policy has become more powerful since the 14th Five-Year Plan, and the deficit ratio has increased from 2.7% to 3.8%, and has further increased to 4% this year.
1. Fiscal and monetary policy has increased, and market confidence has been boosted
The policy signals released by this blockbuster meeting became a turning point in the market. Lan Foan said that the state has arranged a new local government special bond quota of 19.4 trillion yuan, and new tax cuts and fee reductions and tax refunds exceed 10 trillion yuan.
These data show that macroeconomic policies continue to work hard to cope with downward pressure on the economy. The policy signal has a significant guiding role in market expectations. On Friday, short positions in the futures market reduced, and sentiment improved. At the same time, expectations of the Federal Reserve's interest rate cut are also strengthening. According to CME's "Federal Observation", the probability of the Federal Reserve cutting interest rate by 25 basis points in September is as high as 93.9%. This supports global commodity prices, especially raw materials such as iron ore denominated in US dollars.
2. The imbalance in supply and demand, and inventory has risen for seven consecutive weeks
The fundamental pressure cannot be ignored. The latest data shows that the five largest steel stocks in the country have risen for seven consecutive weeks, breaking through 15.14 million tons, at a historical high. Hangzhou's thread inventory even far exceeds the winter storage level, with a surge of 91.81% year-on-year. This shows that although the traditional "Golden September" peak season has entered, the recovery of demand is far less than expected.
The supply of major steel varieties this week was 8.5724 million tons, a week-on-month decrease of 34,100 tons, a decrease of 0.4%. However, the demand side is still weak, with the weekly consumption of the five major varieties being 8.4333 million tons, an increase of only 1.9%.
3. The variety is differentiated significantly, and the board is stronger than the building materials
A noteworthy phenomenon is the obvious differentiation among varieties. This week, the apparent consumption of five major varieties showed a situation of "decreasing building materials and increasing boards".
The output of hot coils and medium plates has decreased, the short-term supply pressure has weakened, and the inventory accumulation has narrowed. Demand in manufacturing, exports, automobiles, home appliances and other industries has not seen explosive growth, but it has performed relatively smoothly and has a certain degree of resilience.
In contrast, social inventory of construction steel (especially rebar) and steel mill inventory are still at historical highs, and supply pressure remains. The downturn in the real estate market is still the biggest drag.
IV. Cost support is stable, raw material prices are firm
The cost-side support is still solid. The average daily output of molten iron gradually rebounded, driving the growth of demand for double cokes and iron ore. Currently, the average daily iron production has recovered to 2.4055 million tons, with a year-on-year increase of 7.69%.
Iron ore prices are relatively strong. Although global shipments have increased slightly and the arrival volume of 45 ports has fallen, iron and water production has been operating at a high level, and steel mills still have rigid demand for iron ore.
Although coke has started the second round of reduction (wet coke quenching price is reduced by 50 yuan/ton, dry coke quenching price is reduced by 55 yuan/ton), due to environmental protection and policy factors, the downward space is limited.
V. Next week's steel price forecast: stable and strong operation
Most institutions are cautiously optimistic about the market trend next week. It is expected that the steel market may consolidate in a narrow range next week, and some even believe that it may show an operating pattern of "suppression first and then rise".
A certain information research institute pointed out that the futures snail 2601 contract is mainly running strongly, and technically above the hourly 5-day moving average, and above the daily line, the pressure is focused on 3150, and support is focused on 3080. The support 3320 is supported under the hot coil and the pressure is 3380. It is expected that the spot price will run stably and strongly next week, with an amplitude of 10-30 yuan.
The market has strong expectations for subsequent stable growth policies, especially in the real estate and infrastructure fields. The introduction of more stimulus policies may become a key variable for steel prices to break through the current fluctuation range.
Warm reminder: The above information analysis is for reference only. Entering the market based on this is at your own risk!
