Trending Review
Today's steel market was generally stable, with the main contracts for rebar futures closing down narrowly, while the main contracts for hot-coil futures closed flat. As of the close, the main rebar 10 contract closed 2974, down 2 points from the previous trading day; the main hot coil 10 contract closed 3089, the same as the previous trading day; the main coke contract closed 1349, up 6.5 points from the previous trading day; the main coke contract closed 785, up 4 points from the previous trading day; the main iron ore contract closed 698.5, down 6 points from the previous trading day. As of 16:00 on the 10th, in terms of finished materials, the average spot price of Lange Steel Mesh rebar was 3,176 yuan, up 2 yuan from the previous trading day; the average price of hot coils was 3,210 yuan, down 3 yuan from the previous trading day. In terms of raw materials, the price of imported PB powder in Jingtang Port is 740 yuan, a decrease of 5 yuan from the previous trading day; the price of Tangshan quasi-first-grade metallurgical coke is 1,190 yuan, the same as the previous trading day; the price of steel billets in the leading steel mill in Tangshan Qian'an was 2,900 yuan, the same as the previous trading day.
Market Analysis
Today's steel prices are mainly stable, the prices of rebar and hot coils have not changed much, and cold-rolled products have fallen slightly, mainly 10-20 yuan. Overall transactions are average, and continuous rainfall in East China and other places has affected the trading pace, and market confidence is still not strong.
There is little room for changes in the steel market today, but the market fluctuates frequently and the price fluctuations are faster. This is mainly due to the great influence of external news. On the one hand, China and the United States negotiated in London. It is reported that after more than six hours of negotiations, the first-day negotiations in London were concluded. A U.S. official said the two sides will meet again at 10 a.m. local time in the UK on Tuesday. It is reported that US Commerce Secretary Lutnik tried to put pressure on other countries to affect trade exchanges with China during trade negotiations with other countries. In this regard, China firmly opposes either party to reach a deal at the expense of China's interests. Obviously, there were some twists and turns in the negotiation process, so the market opened lower in the afternoon and fluctuated by more than 20 points in a short period of time. Although the market has rebounded since then, it has not yet returned to the 2985 high set in the morning.
On the other hand, the news of coal mine safety inspections and production suspensions was also quite disturbed. There were reports that all coal mines in Wuhai and Fenxi were stopped, but in fact, this news was inaccurate. The coal mines in Wuhai have basically been in production since the Spring Festival and the inspection of the supervision team did not affect the large-scale suspension of production. Moreover, the suspension of production is just a market behavior, not a policy closure. After the third round of coke fell, the prices of coking coal and coal were temporarily stable than before, but the prices of imported resources were still very low, and the price difference between domestic and foreign coal still needs to be repaired and balanced.
The main factor restricting the market rebound at present is insufficient market confidence. Behind this is the fact that the fundamental supply and demand relationship has not improved significantly. It is just that the oversold rebound and the basis repair. Spot falls slowly and the market falls quickly need to be adjusted. However, the current situation of the industrial chain, the current situation of demand and the downstream situation have not yet allowed steel to emerge from the bull market. According to the Bureau of Statistics, the industrial producer price index (PPI) in May fell by 0.4% month-on-month, the same as last month, and a year-on-year decrease of 3.3%, an increase of 0.6 percentage points from the previous month. Coal demand is in the off-season, with sufficient coal storage in power plants and ports. In addition, new energy power generation costs are low and the substitution effect is strong. The prices of coal mining and washing industries have dropped by 3.0%, and coal processing prices have dropped by 1.1%. The increase in high temperature and rainy weather in the southern region has affected the construction of some real estate and infrastructure projects. In addition, the production and supply of steel and cement and other building materials has been sufficient. The prices of ferrous metal smelting and rolling processing industries and non-metallic mineral products have both dropped by 1.0%. The above four industries have affected the PPI by a total of about 0.18 percentage points on the previous month.
Taiwan Outlook
From the current market operation, steel prices are still not able to come out in the fluctuation. Since a strong rebound last week, it has been adjusted for 4 days, and both bulls and bears lack a sense of direction. From the perspective of price, it is still in the process of repairing the basis. Judging from the trend of market funds, the signs of intraday washing are still very obvious. In the short period of the short period, due to mixed news, it is difficult for long and short to go out. In terms of spot, the market guidance is the basis, the short-term fluctuation space is smaller, and transactions are also purchased on demand, and there are few cases of bottom buying.
From the market, the black system rose and fell, coking coal and coke closed slightly higher, but rebar and iron ore closed slightly lower, and hot coil closed flat. The main 10 contract of rebar finally closed 2974, down 2, holding 2.165 million lots and reducing positions by 31,000 lots. The daily line entered the fourth day of sideways, and temporarily closed above the 5-day moving average at the end of the trading day, but there was no breakthrough above and was suppressed around 3085. However, the support strength around 2950-2960 below the intraday trading was also strong, and it did not end the big rebound last Wednesday. In the next step, we will continue to pay attention to the disturbances in news such as the progress of Sino-US negotiations, and effectively break through 2985 upwards before we can further rebound. (Langge Steel Wang Yingguang)
