Since entering the fourth quarter, the demand of the national square management market has been relatively vigorous, which has led to a substantial increase in iron and steel production. As a result of the increase in smelting costs, the price fluctuation has risen, the profits of the steel industry have increased significantly, and the overall situation has continued to warm up. 今后中国市场行情如何？尤其今年冬天，即春节之前的价格走势将会怎样？再次成为市场参与者们的关注热点。
What is the market price of Chinese square tubes in the future? What is the price trend especially this winter, before the Spring Festival? Once again become the focus of attention of market participants.
1, the fundamentals are healthy and do not have a substantial drop base.
It should be said that so far, the Chinese market is basically healthy. Mainly reflected in the decision-making departments to expand domestic demand, especially to stabilize the way of investment in infrastructure, to cope with the severe external environment, to defuse the downward pressure of the economy. For example, monetary policy tends to be loose, fiscal policy is more active, tax reduction, support for private enterprises and small and micro enterprises, etc. With the gradual emergence of the above policy effects, China's domestic demand for square management continued to boom in the fourth quarter of this year, thus digesting the ever-reaching new steel increment, and the national inventory of square management society remained low. At the beginning of November 2018 (November 2), the national comprehensive inventory index of square management was 87.6, which was 53% lower than the peak in the first quarter of this year (March 9), and 1.7% lower than the same period last year. Among them, the inventory index of long timber is 95.6, which is nearly 70% lower than the peak in the first quarter of this year (March 9), and 14% lower than the same period last year. It is this healthy fundamentals that boost market confidence and do not have the basis for a sharp drop in prices in a short period of time.
2, before the Spring Festival, funds are more prudent, generally do not buy big.
According to the previous law, winter is a slack season of demand, and the supply-demand relationship is relatively loose. Therefore, before the Spring Festival, funds are more cautious, especially futures speculative capital, which generally will not buy in large quantities, which makes it difficult for the square price to rise sharply.
The spot purchase before the Spring Festival is mainly the "winter storage" of the square tube. What is its scale? This depends not only on market confidence in the coming spring, but also on how to profit from iron and steel enterprises. At present, iron and steel enterprises sell smoothly, inventory pressure is not large, so price concessions will not be too large. If this situation continues, it is expected that steel traders' enthusiasm for "winter storage" will not be too high.
3, various factors are relatively determined, and the market is relatively stable.
The two major uncertainties in the Chinese side market in 2018 were the Sino US trade war and the two environmental protection limited production. At present, the market has already digested these two factors and is expected to be stable:
China's export control has declined considerably, even in the worst case of the Sino-US trade war. Moreover, policy-making departments have policy reserves for this. It is expected that the more severe the external demand situation is, the more vigorous the domestic demand will be. The situation of stable, medium and high-speed growth of China's economy will not change, thus laying a solid foundation for China's continued vigorous demand for management.
What is the limit of environmental protection? It depends mainly on weather conditions. For the need of economic growth and supply assurance, if there is no severe haze weather, it is estimated that during the heating period this winter, iron and steel enterprises will not limit production "one size fits all" and the intensity will not be too great. In this regard, the market has reached a consensus, there is little disagreement, so that the "hype theme" corresponding reduction, slowing down market shocks.
It can be seen that this winter China's market of local management should be running at a high level. Of course, because the current level of inventory is low, especially building materials inventory continues to decline; at the same time, spot prices are much higher than futures prices, and spot prices do not show signs of a sharp drop. Therefore, the market still has a certain basis for growth. Now it is "everything is ready but the East wind" and needs a "Mars detonates the rising gunpowder".
What is this "Mars"? It is not known at present. Maybe it's the turn of the Sino-US trade negotiations that has brought about a sudden positive outcome. Maybe it's the severe haze that has caused the steel companies to exceed their expectations in limiting their output. Maybe it's also a major accident. In short, it is a great unexpected news. Otherwise, in the absence of major hype, "rising gunpowder will not explode", the market will remain relatively stable this winter.