"Long drought and rain," and "Played a strong shot to the steel market," the steel industry insiders used this to evaluate the favorable effect of the central bank lowered the deposit reserve ratio.
On the evening of November 30, the Central Bank announced that, starting from December 5, the deposit reserve ratio for deposit-taking financial institutions was cut by 0.5%.
Regarding the downward adjustment of the deposit reserve ratio, although industry experts generally stated that the impact was limited, on the second day (December 1st) after the news was announced, iron ore, steel billets, and various steel products stopped falling slightly. rise.
Some industry steel traders pointed out that the downward adjustment of the deposit reserve ratio is a long-term drought and drought for the steel market that is trying to rise and rise and pessimistic. With the current shortage of resources in the market, the steel market may welcome Come for a short period of "Little Spring". At the same time, another steel trader pointed out that the declining economic growth and the declining demand for steel will become the main trend in the later period, and the steel trade industry needs to “fight a protracted warâ€.
Steel City welcomes a brief "Little Spring"
After the deposit reserve ratio was raised for 12 consecutive times, on the evening of November 30th, the central bank suddenly announced that from December 5th, the deposit reserve ratio of deposit-taking financial institutions was cut by 0.5%.
It is reported that this is the first time the central bank has lowered the deposit reserve ratio since December 25, 2008. Before this downgrade, the deposit reserve ratio of large financial institutions has reached an historical high of 21.5%.
Regarding the central bank’s reduction of the deposit reserve ratio, Liu Huifeng, a researcher at the “My Steel Net†research center, said that the impact on the steel market is mainly reflected in the mentality, and it has virtually no effect on the looseness of funds. “Unless it is lowered several times†. He also pointed out that from the historical data, it can be seen that the adjustment of the deposit reserve ratio has a significant lag in the impact of steel prices.
In spite of this, on the second day when the reserve requirement ratio was announced, the domestic steel spot market quickly stopped falling and rebounded. According to statistics, on December 1st, 61.5% of Australian fines rebounded and rebounded by US$2/ton to US$134/ton; Tangshan billet price rose by RMB40/ton. In addition, most domestic markets such as building materials, hot-rolled products, etc. appeared slightly Explore.
A Northeast Steel trader said that the steel price in the early period dropped sharply. Due to the cautious attitude, steel traders had generally fewer orders in October and November, which caused the shortage of current traders' resources. The reduction in the deposit reserve ratio for the steel market that wants to rise and rise and pessimism is filled is like the “long drought seal and rain showerâ€, and the steel price will appear as “Little Yangchun†market. In addition, the rebound in steel prices will also bring enthusiasm to the market for winter storage, "the stock market will soon appear."
According to domestic steel traders in Hangzhou, Changzhou, Fuzhou, and other markets, the current steel industry, building materials, hot rolling and other varieties of resources are incomplete specifications. The inventory data of the five major domestic rebar, wire rod, medium plate, hot-rolled, and cold-rolled varieties in China's 26 key cities under the “My Steel Net†statistics show that as of November 25, the total social inventory of the five major varieties was 13.136 million tons. It decreased by 28,000 tons from the previous week and continued to hit a new low during the year. It is reported that the steel market has been destocking for seven weeks.
In addition, according to the latest data from the China Iron and Steel Association, China’s major statistical steel companies’ average daily average crude steel output was 1.484 million tons in mid-November. The average daily crude steel production is estimated to be 1.637 million tons, which is the lowest in the whole year.
In this regard, there are industry insiders believe that the bottom of the policy has already emerged; moreover, due to the impact of the previous steel mill overhaul, the current supply pressure on the steel market has decreased, coupled with the pressure of social steel stocks in the steel market, and “currently the steel mills have generally introduced flat prices. The ex-factory price of steel mills will no longer fall below the low price seen in the previous period, and the bottom of steel prices has also loomed. "The current steel market is undergoing a bottoming process."
It is reported that on the first day of December 1, Shagang, Yonggang and other steel companies introduced the price policy in early December, and the ex-factory prices of construction materials were reported in unison.
Steel traders: playing a protracted battle However, many steel traders are still cautious about the view that “steel prices will bottom out,†and “winter bank stocks will appear.â€
Mr. Zeng Aihui of Shanghai Baobenchang Metal Materials Co., Ltd. believes that the current market stocks seem to be small, but some time ago, steel traders who booked resources for steel mills were quite a few. It is expected that the resources of the steel mills will reach the market in the middle and late December, and the steel market inventory will increase.
It is worth mentioning that since the crude steel output of steel mills remained high before October, and the steel stocks have been declining in recent days, steel traders have always been “vigilant†about the current stock of steel stocks in steel mills. Some steel traders bluntly stated that steel mills are under heavy pressure to destock at the end of the year and there will be a large number of steel resources in the later stages of the market. It is expected that the market inventory in the latter period will continue to remain low and provide support to steel prices.
According to reports, in the middle and late November, there were market rumors that a steel mill had “thrown out†a batch of backlog of hot-rolled products at the low price in eastern China at the end of November. “It could not be said that the 800,000 tons of rumors, but there are May be 200,000 tons, mainly hot-rolled C material, the advantage is that the specifications are complete, throw the price of goods than the market price. Steel's 'discourage' will not end here,†said people familiar with the case.
In addition, Zeng Aihui also pointed out that the Spring Festival came early this year, leaving steel traders only half a month of trading time in January, so this part of the resources is expected to remain for sale in February next year. Accordingly, market inventories will begin to increase in the middle and late December, while sales in January will be less. It is expected that the market inventory will increase by a large margin in January-February next year.
Mr. Guo Yongjun of Shanxi Jincheng Metal Materials Co., Ltd. bluntly stated that the reduction in the deposit reserve ratio will bring about a psychological “restlessness†for the steel market, and in response to the current shortage of market resources, steel prices will rebound. However, as the steel market continues to sluggish downstream demand will not be coordinated, the rally may be "one-day tour" or "three-day tour" market.
The downturn in demand may be the biggest obstacle to the continued upward movement of steel prices. A few days ago, the China Federation of Logistics and Purchasing announced that China's Manufacturing Purchasing Managers' Index (PMI) was 49.0% in November, down 1.4% from the previous quarter. It is reported that 50% of the manufacturing industry is shrinking in the "economy line," and this PMI has fallen within 50% for the first time since March 2009 and is 2.9 percentage points lower than the historical average. The data shows that the economy has increased. The trend of falling back will continue.
Some steel traders in Shanghai have indicated that the decline in economic growth and the decline in demand for steel will become the main trend in the latter period. It is expected that demand in the steel market will continue to decline in the first quarter of next year, while steel prices will show “continuous rises and long-term explorationsâ€. The trend, "Steel traders to prepare for a protracted war."
On the evening of November 30, the Central Bank announced that, starting from December 5, the deposit reserve ratio for deposit-taking financial institutions was cut by 0.5%.
Regarding the downward adjustment of the deposit reserve ratio, although industry experts generally stated that the impact was limited, on the second day (December 1st) after the news was announced, iron ore, steel billets, and various steel products stopped falling slightly. rise.
Some industry steel traders pointed out that the downward adjustment of the deposit reserve ratio is a long-term drought and drought for the steel market that is trying to rise and rise and pessimistic. With the current shortage of resources in the market, the steel market may welcome Come for a short period of "Little Spring". At the same time, another steel trader pointed out that the declining economic growth and the declining demand for steel will become the main trend in the later period, and the steel trade industry needs to “fight a protracted warâ€.
Steel City welcomes a brief "Little Spring"
After the deposit reserve ratio was raised for 12 consecutive times, on the evening of November 30th, the central bank suddenly announced that from December 5th, the deposit reserve ratio of deposit-taking financial institutions was cut by 0.5%.
It is reported that this is the first time the central bank has lowered the deposit reserve ratio since December 25, 2008. Before this downgrade, the deposit reserve ratio of large financial institutions has reached an historical high of 21.5%.
Regarding the central bank’s reduction of the deposit reserve ratio, Liu Huifeng, a researcher at the “My Steel Net†research center, said that the impact on the steel market is mainly reflected in the mentality, and it has virtually no effect on the looseness of funds. “Unless it is lowered several times†. He also pointed out that from the historical data, it can be seen that the adjustment of the deposit reserve ratio has a significant lag in the impact of steel prices.
In spite of this, on the second day when the reserve requirement ratio was announced, the domestic steel spot market quickly stopped falling and rebounded. According to statistics, on December 1st, 61.5% of Australian fines rebounded and rebounded by US$2/ton to US$134/ton; Tangshan billet price rose by RMB40/ton. In addition, most domestic markets such as building materials, hot-rolled products, etc. appeared slightly Explore.
A Northeast Steel trader said that the steel price in the early period dropped sharply. Due to the cautious attitude, steel traders had generally fewer orders in October and November, which caused the shortage of current traders' resources. The reduction in the deposit reserve ratio for the steel market that wants to rise and rise and pessimism is filled is like the “long drought seal and rain showerâ€, and the steel price will appear as “Little Yangchun†market. In addition, the rebound in steel prices will also bring enthusiasm to the market for winter storage, "the stock market will soon appear."
According to domestic steel traders in Hangzhou, Changzhou, Fuzhou, and other markets, the current steel industry, building materials, hot rolling and other varieties of resources are incomplete specifications. The inventory data of the five major domestic rebar, wire rod, medium plate, hot-rolled, and cold-rolled varieties in China's 26 key cities under the “My Steel Net†statistics show that as of November 25, the total social inventory of the five major varieties was 13.136 million tons. It decreased by 28,000 tons from the previous week and continued to hit a new low during the year. It is reported that the steel market has been destocking for seven weeks.
In addition, according to the latest data from the China Iron and Steel Association, China’s major statistical steel companies’ average daily average crude steel output was 1.484 million tons in mid-November. The average daily crude steel production is estimated to be 1.637 million tons, which is the lowest in the whole year.
In this regard, there are industry insiders believe that the bottom of the policy has already emerged; moreover, due to the impact of the previous steel mill overhaul, the current supply pressure on the steel market has decreased, coupled with the pressure of social steel stocks in the steel market, and “currently the steel mills have generally introduced flat prices. The ex-factory price of steel mills will no longer fall below the low price seen in the previous period, and the bottom of steel prices has also loomed. "The current steel market is undergoing a bottoming process."
It is reported that on the first day of December 1, Shagang, Yonggang and other steel companies introduced the price policy in early December, and the ex-factory prices of construction materials were reported in unison.
Steel traders: playing a protracted battle However, many steel traders are still cautious about the view that “steel prices will bottom out,†and “winter bank stocks will appear.â€
Mr. Zeng Aihui of Shanghai Baobenchang Metal Materials Co., Ltd. believes that the current market stocks seem to be small, but some time ago, steel traders who booked resources for steel mills were quite a few. It is expected that the resources of the steel mills will reach the market in the middle and late December, and the steel market inventory will increase.
It is worth mentioning that since the crude steel output of steel mills remained high before October, and the steel stocks have been declining in recent days, steel traders have always been “vigilant†about the current stock of steel stocks in steel mills. Some steel traders bluntly stated that steel mills are under heavy pressure to destock at the end of the year and there will be a large number of steel resources in the later stages of the market. It is expected that the market inventory in the latter period will continue to remain low and provide support to steel prices.
According to reports, in the middle and late November, there were market rumors that a steel mill had “thrown out†a batch of backlog of hot-rolled products at the low price in eastern China at the end of November. “It could not be said that the 800,000 tons of rumors, but there are May be 200,000 tons, mainly hot-rolled C material, the advantage is that the specifications are complete, throw the price of goods than the market price. Steel's 'discourage' will not end here,†said people familiar with the case.
In addition, Zeng Aihui also pointed out that the Spring Festival came early this year, leaving steel traders only half a month of trading time in January, so this part of the resources is expected to remain for sale in February next year. Accordingly, market inventories will begin to increase in the middle and late December, while sales in January will be less. It is expected that the market inventory will increase by a large margin in January-February next year.
Mr. Guo Yongjun of Shanxi Jincheng Metal Materials Co., Ltd. bluntly stated that the reduction in the deposit reserve ratio will bring about a psychological “restlessness†for the steel market, and in response to the current shortage of market resources, steel prices will rebound. However, as the steel market continues to sluggish downstream demand will not be coordinated, the rally may be "one-day tour" or "three-day tour" market.
The downturn in demand may be the biggest obstacle to the continued upward movement of steel prices. A few days ago, the China Federation of Logistics and Purchasing announced that China's Manufacturing Purchasing Managers' Index (PMI) was 49.0% in November, down 1.4% from the previous quarter. It is reported that 50% of the manufacturing industry is shrinking in the "economy line," and this PMI has fallen within 50% for the first time since March 2009 and is 2.9 percentage points lower than the historical average. The data shows that the economy has increased. The trend of falling back will continue.
Some steel traders in Shanghai have indicated that the decline in economic growth and the decline in demand for steel will become the main trend in the latter period. It is expected that demand in the steel market will continue to decline in the first quarter of next year, while steel prices will show “continuous rises and long-term explorationsâ€. The trend, "Steel traders to prepare for a protracted war."
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