China's steel market: Cliff Baizhang has beautiful flowers

"Baizhang ice cliffs, there are flowers pretty." Despite the dark cycle, the steel market is still struggling. Recently, under the central bank's downward adjustment of the deposit reserve ratio, the six central banks' joint efforts to prevent liquidity, and the collective advancement of the European and American markets, the steel market, which has suffered a long period of haze, seems to have obtained a trump card to reverse the situation. The frequent occurrence of financial markets has brought a lot of vitality to the steel market. However, as for the steel market as a whole, the funding side is still tight and the downstream demand has not yet been improved. Therefore, although the steel market has obtained policy support, If we want to increase from this transition, we still owe the heat.

According to the monitoring data, under the central bank's downward adjustment of the RRR and the boost of the six international central banks jointly preventing liquidity, the European and American markets have collectively risen in recent days, and the stock market has soared. In terms of steel, on the 1st, Shanghai Hulu 05 gapped 4222, the highest on 4247 after the shock is weak, long clear departure, short-term lighten up, the price rose slightly, to close 4174 up 70, an increase of 1.71 %; technically, the Japanese K line closed negatively, there is a need to cover the 4139-4174 gap, the indicators are strong, and the hourly indicators are high. In the spot market, although steel prices have not changed much for the time being, due to the favorable financial markets, the business mentality has turned to be optimistic, and the spot price has been encouraged by nature will not be small.

It is understood that on the evening of the 30th, the Central Bank lowered the deposit reserve ratio of deposit-taking financial institutions by 0.5 percentage points, starting from December 5, 2011. Industry insiders estimate that the reduction in the deposit reserve ratio will thawed nearly 400 billion yuan of funds. Although for national credit, 400 billion yuan is not what it is, the possibility that the country's late-stage policies may become loose may increase. Now. Not only that, the confidence of the entire domestic industrial sector has been boosted, the deposit reserve ratio has been lowered, pressure on the downstream enterprises has decreased, and the cost pressure has also been reduced. This is undoubtedly a huge stimulus to downstream demand. If the downstream industry's consumption can really change, then the steel market's demand will also be improved, pulling up the demand for steel. This is the most crucial step for the steel market to reverse the chess game!

The prediction of when the loose monetary policy has come has continued for some time. The central bank’s interest rate adjustment seems to have given the steel market great encouragement. With the increase in the possibility of loosening of policies, steel mills that had to stop production and repair due to various factors in the previous period will also resume production. The author believes that after the end of the year's settlement, the steel market is likely to usher in a fierce battle to rise under the constraint of no pressure. Just think, if the steel mill production capacity is restored, the demand for raw materials will undoubtedly increase. The raw material market, which is currently in the midst of sluggish growth, will surely usher in warm spring. If iron ore and steel billet prices can rebound under the demand, then steel prices will usher in the most favorable driving force for cost. Therefore, the trend of steel price increases after the year is more obvious.

In the short term, although some businesses are still facing relatively tight financial pressure, the effect of funds on the upward restraint of steel prices is not small, but with the arrival of the beginning of the month and the completion of the settlement at the end of the year, most steel traders have The funds will be more lenient temporarily, so it is unlikely that steel traders will lower their steel prices. Especially after the end of the month's ** operation, according to the usual practice, at the beginning of the month there will be a lot of businesses intending to pull up steel prices to test the actual situation in the market, and this month is not the case. The author believes that under the tentative pull-up of merchants, there may be a warm wave in the market. Insufficient supply of resources in the market will also indirectly support the steel price in an indirect way. With the assistance of the central bank adjusting the deposit reserve rate, Recently, the possibility of a rebound in steel prices has increased, but overall, due to continued weakness in the demand side, the recent trend of steel prices is more stable and stronger.

On the whole, if the bank cuts the deposit reserve rate, it means that the steel price will completely reverse the situation from weak to strong. This is an irresponsible forecast. I want to remind businesses that although the current financial market is positive, there are even many people speculating that the European debt crisis is about to turn. However, as far as the steel market is concerned, the current optimism regarding funds and prospects is at the message level, and substantial interest has not yet appeared. Therefore, the risk of low steel price operation still exists. However, due to good expectations, the possibility of a rebound in steel prices after the year is very large, so businesses can prepare in advance.