Recently, my country's steel and coal markets have fluctuated significantly, and product prices and supply and demand conditions have shown complex and changeable characteristics. Investors need to pay close attention to these changes in order to capture potential opportunities and avoid risks.
The finished material market: the price is relatively strong but the hidden worries are revealed
Yesterday, the price of finished materials fluctuated and the overall trend showed strong momentum. But behind this trend, there are many risks. According to specific analysis, the production of rebar has decreased compared with last month. This change is mainly caused by companies' shift to other products and equipment for maintenance and the reduction in the operating rate of electric furnaces. In addition, the loss of electric furnaces continues to intensify, and concerns about their future start-up situation are increasing. Although inventory has decreased compared with last month, the reduction is gradually shrinking. Demand has been declining continuously, and the month-on-month index shows a downward trend, and is expected to enter a seasonal sales trough soon. Meanwhile, hot coil production rose month-on-month, and the restart of production lines led to a first increase in total inventory, though there is limited room for demand growth. When formulating strategies, it is recommended to focus on short selling at high levels, but it is not advisable to pursue short opportunities too much.
Coking coal market: Futures prices rise and fall
On Wednesday, the coking coal futures market fluctuated significantly, with prices rising first and then falling. The closing price of the 09 contract was 775 yuan, with a decline of 1.71% on the day. The prices of some scarce main coking coal varieties have rebounded, and the trend of falling prices of mainstream coal varieties has also slowed down. The results of London trade negotiations show a neutral and optimistic trend. my country's mining output has declined, but Mongolia's coal imports have rebounded, and the overall supply has remained stable; at the same time, iron and water production has decreased, and downstream enterprises are not willing to replenish inventory. In the short term, futures prices are expected to fluctuate within a certain range; from a long-term perspective, the problems of oversupply and insufficient demand are more obvious. At the same time, we should also pay attention to changes in potential factors such as macroeconomic sentiment.
Coke market: Futures prices fall and face risks of lowering
On Wednesday, coke futures prices fell, with the closing price of the 09 contract at 1,341 yuan, a drop of 0.85%. Last week, the third round of price adjustment measures had been implemented, and this week the Tangshan area also further lowered prices. The decline in coal prices has brought opportunities for profit growth to the steel industry. Despite this, the profitability of steel companies is generally low and the price cut is planned to start next Monday. The decline in coal prices has led to a decrease in coke production costs, but coke prices show a tendency to fall but difficult to rise. In view of this, we suggest to investors that short selling should be considered when coke prices are high.
The thermal coal market: a delicate balance between supply and demand
During the Safety Production Month activity, the increase in production supervision has not caused significant changes to the supply chain. Coal prices in the origin are fluctuating violently. At the same time, coal prices in northern ports remain relatively stable, while imported coal prices are showing a downward trend. The typhoon has limited auxiliary effect on hydropower in coastal areas, while the high temperatures in the northwest and north China have led to an increase in the demand for electricity for residents. Foreign power demand has maintained a stable trend, showing a slight downward trend; the growth rate of power plant inventory has slowed down; the inventory in northern ports has also decreased. It is predicted that coal prices are expected to gradually reach a trough in the middle of the first half of the year, but their room for growth is relatively small.
Market macro environment: policy vacuum and trade results impact
The Sino-US trade negotiations are coming to an end, and my country is currently facing a temporary window of macroeconomic policies. The signing of the London Trade Agreement had some impact on the coking coal and coke markets, but the market's response to this showed diversification. From a macro perspective, many factors are affecting the supply and demand expectations and price trends of the commodity market, and investors should pay close attention to changes in the macroeconomic situation.
Investment advice and prospects
Overall, trading strategies should focus on high-altitude operations and should avoid blindly imitating short selling; in the short term, coking coal prices may fluctuate; in the medium and long term, macroeconomic factors such as oversupply and insufficient demand should be paid attention to; when coking prices are at high levels, short selling strategies can be considered; thermal coal may bottom out in the first and mid-month, but its upward potential is relatively limited. During the transaction process, investors need to comprehensively consider the market foundation, macroeconomic conditions and policy changes of each product. Many people have speculated about which product will be the first to undergo price adjustments in various products to be launched on the market?
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