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original title:Rebar Multi-order gradually stops profit Source: Original
This week, the 2101 rebar futures contract reached a new high for the year since the low in September, this round of hike exceeded 400 yuan / ton, which is higher than the previous expectations of the main market. We believe peak season demand will not last long and supply pressure is still present, we advise investors to take more orders for profit.
High season demand drives prices up
The release of demand during the peak season is the key factor driving the rise in armor futures prices. The most direct evidence is that, since the rebound in late September, the sharp rise in rebar futures prices has been accompanied by strong trading on the spot market. On October 9, contract 2101 closed with an increase of 80 yuan / ton and the transaction volume of 237 construction steel traders across the country was 347,700 tons, setting a record for a transaction volume of one day; on October 28, contract 2101 closed with an increase of 52 The transaction volume of 237 construction steel traders across the country was 269,700 tons, which was the second highest transaction value in a single day of October; on November 9, the 2101 contract broke and reached a new high of the year, with a final hike of 77 yuan / ton. The transaction volume of 237 construction steel traders nationwide was 304,900 tons, the highest transaction value in a single day in November. Indeed, the high volume of transactions on the spot market is a feature of peak season demand.
Spot transaction data reflects short-term demand and medium-term demand mainly refers to downstream industry data. On Monday, data released by the National Bureau of Statistics showed that real estate sector indicators continued to rise. From January to October, investment in real estate development increased by 6.3% on an annual basis, with an increase of 0.7% on a monthly basis; the area of new homes increased by -2.6% on an annual basis, with an increase of 0.8% on a monthly basis. Overall, the strong October macro data performance exceeded expectations and China’s economic recovery showed resilience and elasticity, which has some support for commodity prices and stock prices in cyclical industries.
Inventory data also verified the current strong demand. Since mid-October, rebar stocks have continued to be consumed and the consumption rate is still accelerating. In the past five weeks, total rebar inventories have decreased by 839,300 tons, 575,700 tons, 769,100 tons, 876,600 tons and 1.0118 million tons, respectively.
Concerned about the sustainability of the high season
It is now mid-November and the spot market still shows the characteristics of the high season, which confirms our vision of delaying the high season that we have repeatedly talked about in the previous period. “Golden 9 and Silver 10” is the traditional high season of consumption, but the spot market in September this year was “uncrowded”: we proposed to postpone the high season demand to October and November.
However, what needs attention is the sustainability of peak season demand. With reference to previous years, demand will decrease after mid-late November. According to forecasts by the relevant state agencies, cold air activities affecting our country are frequent and intense this winter, and a wide range of rains and snowfalls at low temperatures could occur in northern China. Low temperatures, rain and snow in the northern region mean a loss of construction conditions, but also a drop in demand for rebar. According to the weather forecast, there will be a large-scale cooling in the country in the second half of this week.
The key factor driving up the price of armor is strong demand – once demand weakens, the spike and fall in price will be a high probability event.
The supply pressure still needs to be checked
Also, supply pressure is still the main negative factor to watch out for. Supply pressure comes from the supply of internal resources and the conversion of import and export resources.
The supply of internal resources can be analyzed from the point of view of politics and profit. This year’s autumn and winter production restriction policy has a very limited impact on rebar production; the recent increase in steel prices has significantly improved the production profits of enterprises, which will increase the enthusiasm of enterprises for production.
In terms of processing of import and export resources, the main reason is the decrease in exports and the increase in imports. Imports are divided into two parts: steel imports and billet imports. The latest customs data shows that from January to October, steel exports from China decreased by 10.665 million tons year-on-year, steel imports increased by 7.225 million tons year-on-year, and imported steel billets increased by about 12.62 million tons. Overall, the national steel supply increased by over 30 million tons.
In short, investors holding long orders for rebar futures are advised to gradually stop profit. (Author’s Unit: Southwest Futures)
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