Next week is expected to strong steel price shocks running, upside space is limited

This week, steel prices have risen in succession over expectations, and futures have been pushed to new highs by the fund level. The macro atmosphere continues to be good. On Friday, as the high level of the futures dropped, the spot mood weakened, but the night trading rose again, breaking the calm of the market, billets rise 10 to 3,390 yuan per ton. How will the price of steel go next week? Keep looking down... 1, futures pull up, with the rise of the spot, with the continuous rise in steel prices, high turnover cautious, futures pull up again to break the market calm. This week rebar average price week up 50, hot coil average weekly rise 63, plate average weekly rise 36, this week billet rose 60 to 3390 yuan / ton, from 3400 only a step away. Steel price trend and the fundamentals of a certain degree of deviation, is expected to go ahead, driven by the funds to pull up the futures on the spot to boost the role of strong. And the policy of limiting production in July was frequent. On Friday, the scale of production reduction of major varieties was enlarged, with a production reduction of nearly 240,000 tons. But Meiyu season still brings inventory pressure, social inventory increased slightly, and mainly from rebar 200,000 tons, the total inventory than the same period last year nearly 30% higher, will limit steel prices continue to rise high. In Futures, the macro outlook for good continued to strengthen, the stock market rally drove futures higher, Friday night crude oil rose, the funds took advantage of the situation to pull up again, iron ore led the black department, up 29 to 820, again hit a new high of 822.5, driving the black department to rise, cONCH rose 31 to 3734, conch rose 34 to 3740, coke rose 11 to 1892.5 and coking coal fell 1.5 to 1203. 2, next look at the market changes and influencing factors: good: 1.26 trillion special debt issued, it is understood that the Ministry of Finance has recently issued to the provincial financial departments a new batch of local new special debt. The annual special debt quota of $3.75 trillion, less the $2.29 trillion in advance and the $200 billion to replenish the capital of small and medium-sized banks, is $1.26 trillion, helping to increase infrastructure investment. This week net recall 290 billion yuan next week is expected to start reverse repurchase, the central bank reverse repurchase operations for 10 working days, this week net recall 290 billion yuan, the margin of funds tightened, the total amount is reasonable and abundant. Therefore, the central bank next week to restart reverse REPO operations is a probability event, on the market liquidity support. Shagang Group building materials prices remained stable in mid July, the current trend of raw materials end is still strong, steel mills are willing to support the strong, Shagang building materials prices remained stable in mid July: Negative: European multi-country epidemic rebound extended control period, recently, confirmed cases continue to rise across Europe. In the face of the outbreak, European countries to extend the control period, or even re-open the ban measures. The recurrence of overseas outbreaks will continue to affect domestic imports and exports, especially manufacturing exports. Six provinces in the south have been severely affected, with or without the arrival of plum trees. The South has experienced six rounds of heavy rainfall since the beginning of the season, with rain bands remaining in the Yangtze Plain region recently. The disaster has affected nearly 20,000 people in 26 provinces. Hubei, Jiangxi, Anhui, Zhejiang, Jiangsu and Hunan are still in the Meiyu area, and this year the Meiyu time is relatively early, heavy rainfall, Meiyu days may be more than in previous years. According to the convention, in early July, the process of producing Mei started in Jiangnan district, followed by the middle and lower reaches of the Yangtze River, and finally in Jianghuai district. But this year, according to the weather bureau, from mid-july 15 to 17, there will still be a round of heavy rain in the Yangtze Plain and the northern part of the Yangtze River, so this year may be delayed, which will continue to have an impact on downstream steel demand. Continue to monitor the market turnover and inventory changes. 3. How will the price of steel go next week? To sum up, this week's fluctuations in steel prices are mainly affected by the capital market, futures pull up the spot sentiment, but the Meiyu season brought about fundamental supply pressure still, will affect the future upward space of steel prices. Overall, it is expected to go ahead, there is a certain resilience in demand, steel factory shipments accelerated to support this round of rising, but as steel prices continue to rise, if demand can not continue to be released, the rising trend will gradually slow down, the current high price transaction acceptance is limited, next week is expected to strong steel price shocks running, upside space is limited.