Rebar price rebounded and extinguished

As expected by the market, Shanghai Rebar's rally has been “extinguishing” in less than a month. As of the close of July 30, the main contract price of rebar ** closed at 3,633 yuan per ton, and the turnover dropped by nearly 200,000 lots to 14.12 million contracts. According to market sources, tight bank credit and high debt ratios have caused the iron and steel industry to bear heavy weight. The trading volume of rebar in the market has been shrinking rapidly, and it is expected that the financial impact will still suppress the rebound of the current price.

Bulls are under pressure. After the Spring Festival this year, rebar prices fell sharply due to the weakness of the macro economy and a serious imbalance between supply and demand. Prices in February, March, April and May dropped sharply for four consecutive months, rising from February. Point 4241 yuan / ton down to the lowest point in June 3,391 yuan / ton, a drop of more than 20%.

However, since the end of June, the rebar price has started a wave of rally. Judging from the transaction situation, from June 26 to July 19, the main contract price of rebar ** rose from a low of 3442 yuan per ton to a high of 3712 yuan, and the turnover increased from 1.408 million to 22.10 million contracts. At 56.3%, positions also increased from 787,000 to 1.344 million lots, an increase of 70.7%.

During the period, on July 11, the transaction volume of the main contract of the rebar ** once rose to 4.5 million, and then it began to decline to 12.79 million contracts on July 30, a decline of more than 71.6%, and the transaction of other contracts of this type has not been enlarged.

"This is the direct impact of funds facing the period of the Lo market." Analysts said that the current market is in the adjustment period, a mistake in the judgment of the game market, is a direct loss, capital is even less.

"Funding up" and attacking the steel industry itself is a capital-intensive enterprise and it occupies more funds. Due to the weak overall performance of the industry in recent years, both the production enterprises and steel traders are relatively difficult to manage, resulting in frequent occurrences of steel traders and private enterprises. Business owners "run the road" phenomenon. In addition, due to the tight capital chain, the collapse of traders, banks sued the steel traders and other phenomena have been concentrated outbreak, the steel industry to the banking industry has become more difficult.

According to market analysts, in the context of the overall high debt ratio of the steel industry and declining profit margins, it is more difficult for steel companies, especially small and medium-sized manufacturers, to obtain ** from banks. Hanlin Jing, a researcher at Greene, said that even on July 21 when the central bank announced the full liberalization of interest rate control by financial institutions, the market generally believes that it will reduce the financing costs of the entity, but it has a very limited impact on the steel industry.

Coins also have the opposite side. Jin Rui ** analyst Zhou Ting believes that if only referring to the fracture of the capital chain of steel companies, the medium and long term will help the industry to survive the fittest and promote the deleveraging of the domestic steel market. From another point of view, the financial status will affect its financial attributes. When the funds are plentiful, it will be conducive to rising prices due to the demand for asset allocation. On the contrary, the tension on the capital side will weigh on prices.

In the second half of the year, the price rebound was not suppressed, and the spot-side performance was not satisfactory. Zhou Ting indicated that the willingness to accept goods at a high price has shrunk significantly, indicating that the demand side of the steel market is more cautious about the outlook. The arrival of the “golden nine silver and ten” peak season may boost demand for spot goods, but the economic growth slows down and stimulus policies are more pronounced. Under mild conditions, there should not be too much expectation for terminal demand in the second half of the year.

He further stated that the rebound in steel prices this time was mainly boosted by the supply-side limited production “combination boxing”, and this impact is expected to continue in the short term. In the medium and long term, if domestic steel industry capacity reduction and structural upgrading continue, Deepening will reverse the supply and demand structure of the entire market.

Eliminating outdated production capacity may be a “meat sore”, and the clearing of the steel market can be interpreted as good news. Market participants believe that in the medium term, although the desire to eliminate backward production capacity is good, but the steel industry is a pillar industry in the local area. While solving employment, it also increases local taxes, and the implementation effect of the policy may not be satisfactory.