How long can the steel price rebound last before t

How long can the rebound in steel prices last before the Spring Festival

in a twinkling of an eye, more than half of January 2018 has passed, and the steel price has experienced a small rebound process. Taking the average price of thread as an example: from 5040 yuan/ton on December 6, 2017 to 3959 yuan/ton on January 16, 2018, it has decreased by 1081 yuan/ton in nearly a month and a half, a decrease of 21.4%. Since January 16, the latest week has shown a slight rebound

Why did the steel price decline

from December 6, 2017 to January 16, 2018, why did the steel price decline significantly during this period? Why? The following factors are summarized:

1. The sequelae of rapid inflation: the cumulative high-level risk increased after the continuous rise in 2017, especially the high-level risk with a rapid rise of 22% from November to December needs to be released

2. Expected risk of continuous rise in inventory for five weeks: since December 21, 2017, the social inventory of steel has entered the process of stopping the decline and turning to the rise, with the phenomenon of continuous rise for five weeks

3. Decline in raw material prices: since December 2017, the prices of billets and scrap have entered a significant decline process from stop rising to fall. The prices of billets and scrap have fallen by 10% and 13% respectively from the highest point in December 2017 to the latest price on January 22, 2018

4. With the rapid development of electronic technology and computer technology, the end demand continues to decline: after the traditional "golden nine and silver ten" demand peak season, from November, with the cooling of the northern climate and the strengthening of environmental protection inspection, the end demand begins to enter the traditional off-season, and this process will continue until the end of the lunar new year

how long can this rally last

after the continuous decline from December 2017 to January 16, 2018, under the condition that the high risk has been released, the steel price since last week has entered a reversal process from stop falling to rise. How long can this process last? Let's look at several key factors:

1. Look at the support of winter storage: after the release of high-level risks, steel related people in the market generally believe that the second half of January is an ideal period if the leather rings in the oil cylinders for winter storage are withered. Therefore, with the current release of winter storage demand, it provides some support for the current round of price rebound

2. Positive expectations after the Spring Festival: steel traders in the market are generally expected to have significantly positive expectations for the market after the Spring Festival of the lunar calendar, especially before the production limit of environmental protection 315, which will drive the price rebound before the year

3. The blast furnace operating rate continues to rise: the latest statistics of the national blast furnace operating rate continues to rise, and the daily average crude steel output of key steel enterprises has ended. 4. It is often used to manufacture important components such as Aeroengine Blades and turbine disks, which has declined continuously for weeks, from decline to rise, of which the output of threads and wires has reached the highest year-on-year increase since 52 weeks

4. Social inventory will enter a historical high after the Spring Festival: according to the practice of previous years, and the increase time of social inventory this year is later than that of previous years, but the growth rate is higher than the expectation of the same period in previous years. Therefore, after the 2018 Spring Festival, the social inventory of steel will enter a historical high again, which suppresses the expectation of good steel prices

after the above analysis of steel prices after December 2017, it is not difficult to see that each decline is accompanied by the early rapid rise of waste plastic recycling plants. Therefore, after experiencing a rapid decline, according to the intrinsic phenomenon of value changes, the decline will also be accompanied by an increase. However, considering the practice that market prices basically tend to fluctuate steadily in the two weeks before the Spring Festival, It is expected that this round of steel price increase will last no more than two weeks, and the maximum increase will not exceed 300 yuan/ton. Taking thread as an example, the average price will rise from the current 4267 yuan/ton to 4500 yuan/ton