On the one hand, the market’s expectations for production restrictions last week should have been reflected to the greatest extent. This expectation is difficult to be further strengthened this week. The actual supply will increase slightly this week or month-on-month due to profit expansion; the demand side will continue to be weak due to the disturbance of the typhoon in the East China provinces. . On the other hand, from a technical point of view, the weekly steel price line has been "six consecutive positives", which is relatively rare in history, and adjustments this week are normal. From a longer-term perspective, the decline in real estate and exports in the later period is relatively certain. At the same time, after the domestic and overseas steel price gaps have converged, the probability of a decrease in domestic steel exports and an increase in imports will increase, so that the market supply gap may be expected to decline in the future.
The fundamentals of iron ore continued to weaken last week, and the overall price of ore fell sharply. Traders were more active in shipments, but steel mills focused on on-demand procurement. This week, the global delivery volume of iron ore has recovered. At the same time, the domestic iron ore arrival volume will fall from the high level this week due to the relatively small number of early shipments, but it will still be the medium level this year, while the demand side Affected by the increase in blast furnace maintenance and repairs, it continues to decline and is at a low level this year. Therefore, overall, the pattern of loose iron ore supply and demand has not changed, and port inventory will continue to accumulate. However, after a sharp correction in ore prices last week, the iron ore market prices this week may be dominated by shocks, and the spreads of some varieties have begun to shrink.
Although the adjustment of the billet supply and demand structure data this week tends to be optimistic, the downstream steel rolling profit continues to maintain a meager profit situation, and the transaction maintains an off-season effect, which directly inhibits the enthusiasm of downstream steel rolling billet picking. This is reflected in the high inventory of upstream and downstream finished products and the decline in billet inventory. . The increase of billet storage inventory is not only the factor of importing to the port, but also the operation of the trade link is being put into the warehouse. From the perspective of the extent of storage inventory accumulation, low supply is the main cause, capital pressure and cautious market sentiment. In the short term, the activity of the spot market may closely follow the changes in sentiment, and the bias of sentiment is more likely to be concentrated in the rough market. Can the expectation of steel output reduction continue to be fulfilled in the short term? If it continues to be fulfilled, the spot market will show that volume and price follow up to a certain extent. It is generally estimated that the short-term billet prices may remain high and fluctuate.
