Affected by the new round of cold wave, construction sites were suspended, steel market demand continued to weaken, and transactions continued to be low. As the Spring Festival approached, the market winter storage gradually started, and some market participants looked forward to the “open door” in the first month of 2019. However, analysts believe that the performance of the winter storage is expected to be difficult, and it is not appropriate to be too optimistic about the trend of steel prices in January.
The spot market remained stable
Looking back on the trend of December 2018, in the spot market, steel prices stopped falling and stabilized, and some regions rebounded in a narrow range, but due to limited demand, coupled with fluctuations in rebar futures prices Intense, market operations are relatively cautious, and the rebound is limited.
During the New Year's Day holiday, most of the spot market remained stable, and billets and some markets saw a small increase, but the market transactions were also light. On the first trading day after the holiday, the black futures were weak, and again narrowly fluctuated. The market is cautious, and the spot market is weakening simultaneously," analyst Hou Jiwei said.
Last week, the social inventory of rebar was 3,419,100 tons, an increase of 144,300 tons from the previous month; the inventory of steel mills was 1,896,400 tons, an increase of 63,400 tons from the previous month, and the factory and social libraries increased.
Guodu Futures analyst Wang Qiongwei said: "The operating rate of blast furnaces in steel mills last week, the overhaul of blast furnaces increased, the overall production is still limited. Rebar production has slightly increased, winter storage has begun, steel mills coke, Inventories of raw materials such as iron ore have risen.
Due to the recent winter storage and northern timber, the price of northern rebar has risen slightly, and the price of rebar in the south has been declining. There is not much room for adjustment between the north and the south. "
"At present, the macro environment is under pressure, real estate sales are deserted, and the fiscal policy is loose, but the effect is still not transmitted to the terminal consumption. The rebar transaction is mainly determined by the winter storage situation." Wang Qiongwei believes.
"Opening the door" market is difficult
Looking forward to the market outlook, from a fundamental point of view, Nanhua Futures Research pointed out that the recent supply-side policy pressure has been loosened, some blast furnaces resumed production, and molten iron production has There must be room for recovery, the electric furnace started to maintain a low position, and the output of rebar increased slightly. However, as the Spring Festival approached and the construction site stopped working, the winter storage of the steel market gradually started, and the actual demand was insufficient. The local steel mills introduced the winter storage subsidy policy, which was close to the psychological price of traders. The inventory contradiction was weaker than last year..
"It is expected that policy pressures will be slightly loose in the later period, demand will continue to be weak, and there will be little contradiction in winter storage. Rebar may be dominated by narrow fluctuations."
for January 2019 Steel market, Hou Jiwei said that the overall trend is still not optimistic, the first half of the month or a narrow range of yin, the second half of the month or sideways, the full month of decline reference 50-150 yuan / ton.
He analyzed, first of all, January is the off-season of traditional demand. As the winter deepens, the demand in the north has basically stagnated. In the case of a large number of northern materials in the southern market, the southern market quickly entered the state of oversupply, and the inventory has entered. In the rapid accumulation phase, the price lacks strong support. Secondly, although some steel mills have introduced winter storage policies, the market reaction is very dull due to the general price advantage and the timing is not yet mature.