Are Prices to Drop or Rise? Steel Prices Fluctuate, What Should Steel Traders Do?

Last night's trading session, onzzjUnder the influence of the meeting, the spiral disc surface directly opened higher, once again challenging the previous high point. However, it quickly surged and then fell back after the morning opening, with overall upward pressure remaining quite evident. In this situation, how should steel traders make their choice—whether to cash in profits at higher levels, continue trading in the stockyard, or believe in expectations?

Yesterday, the Political Bureau of the Central Committee of the Communist Party of China held a meeting, during which it reviewed the "Several Policies and Measures to Promote the Rapid Rise of the Central Region in the New Era." The meeting emphasized that the strategic positioning of the central region as a key grain production base, energy and raw material base, modern equipment manufacturing and high-tech industry base, as well as a comprehensive transportation hub of our country must always be closely adhered to. Efforts should be made to advance all key tasks, driving the rise of the central region to achieve new significant breakthroughs.

The conference is still focused on our country's infrastructure.5The issuance pace of local government and special-purpose bonds has notably accelerated.Recently, an article by China International Capital Corporation (CICC) mentioned that the issuance rate of local government debt has significantly accelerated.5No Chinese content provided. Please provide the Chinese text for translation.5000Billions, accounting for the issued this year43%In this situation,ZZJThe meeting has once again clarified the direction of bond issuance, reducing the time for review and project initiation even further.Not only does it accelerate capital turnover, but it also boosts the expectations for steel demand.Under the further release of physical work volume, there is certain support for screw consumption.

In addition, China's real estate stimulus policies are advancing gradually, not only rapidly expanding in second-tier cities like Hangzhou but also beginning to take effect in the first-tier cities.Recently, Shanghai has issued new real estate policies, including: 1. Improving the home purchase conditions for non-local residents. Reducing the years of social insurance or personal income tax payment required for non-local households and single individuals purchasing homes, and expanding the home purchase areas. 2. Adjusting the relevant policy language. Removing the restriction on home purchase for divorced individuals, revising the regulations on housing gifts, and supporting companies in purchasing small-sized second-hand apartments for employee rental.The new policy significantly relaxes the home-purchase conditions for foreign residents, also conveying the determination to optimize the property structure in the market.

Despite ongoing macroeconomic benefits, the steel industry seems to be far from peaceful internally. The failure of hedging logic, the confrontation between capital and the industry, has made the market somewhat "mysterious and unpredictable."4As the month progresses with evolving supply-demand mismatches in the industry and a rise in demand, steel prices have begun a strong upward trend. Following the peak in demand, the market has entered a month of high volatility. To prevent the market from weakening again, the industry is taking advantage of the premium in the market to enter into hedging. However, under the overseas inflation logic, commodities led by precious and non-ferrous metals have surged beyond expectations, and the black series products have regained strength on the market, causing the hedging logic of the industry to fail. At this point, with the industry as an opponent, capital has quickly driven up prices.This round of market conditions seems to still be benefiting the industry at a loss.。

In this market scenario, while prices are rising, the industry's reality has not improved much. Downstream steel traders still face the situation of easy selling but difficult delivery, and the transactions of finished products have started to decline along with the decline of the market. On the other hand, at the current market position, it seems that the funds are also struggling to sustain, with a significant reduction in the holding of funds, as evidenced by the main螺纹 contract, where the holding volume has decreased by more than three days from its peak.15No Chinese content provided.In summary, the market has resumed震荡 at this level, with both bulls and bears waiting for an opportunity.。

So, what should steel traders do now? From the perspective of inventory, the current macro situation is still dragging down the industry, the author believes.7Prior to the monthly meeting, there is still room and demand for macroeconomic efforts, and the industry is currently without significant conflicts. However, as we approach the off-season, demand faces uncertainty.Therefore, it is recommended that the inventory be maintained at a moderate to low level, ensuring a healthy cash flow.6The market remains bullish this month, with the current fluctuation range maintained.3740-3815。