Funds are not optimistic, steel prices before the holiday is difficult to rise

Near the end of the month, before the 11th Festival, this is an entangling time period. The stimulation of the holiday season has caused many businesses to take the opportunity to pull up the steel price, but the end of the month's financial pressure has left businesses with weaker steel prices. Regarding funds, the central bank is trying to implement a loose policy. However, the central bank recently released a report saying that the possibility of continuing interest rate cuts is not high, which is why many businesses shouted helplessly.

According to the market report of the China Steel Spot Net, on the 25th, the price of the second class large snail in the Beijing market was 3,550 yuan/ton, which was a drop of 10 yuan/ton from the previous day; the medium-end large screw 3670-3730 in the Shanghai market RMB/ton was up 30 yuan/ton from the previous day; Guangzhou Steel’s second class large screw of Guangzhou Steel was 3,860 yuan/ton, up by RMB 20/ton from the previous day. The closing price of the Shanghai hot market was 3570-3620 yuan/ton, and the market price was slightly stronger. The closing price of the hot market in Tianjin market was 3530-3550 yuan/ton. The pessimistic attitude of the business increased, and the closing price of the hot market in Lecong was around 3550 yuan. / Ton, transaction status is normal. In recent days, the market has been ups and downs, the market mentality has been lost, the inventory is still continuing to reduce throughout the country, some businesses want to continue to pull up steel prices, but by the end of the financial pressure on the end of the shipment will gradually become more willing, steel prices further blocked.

Last week, the central bank's open market achieved a total of 101 billion yuan in net capital injections. This is the first time the central bank has put in net funds for the first time in three weeks. However, as the end of the quarter and the two quarters are approaching, the financial pressure on the market has not been effectively alleviated. In particular, the steel trade market will face a concentration of repayment pressure in September. Therefore, it is estimated that the funding problem will continue to ferment before the end of the month.

Some time ago, domestic prices eagerly rose in some areas, which makes the pressure to stabilize housing prices, some analysts believe that this is not unrelated to continuous interest rate cuts in June and July, it is precisely because such a recent central bank has chosen a steady flow of reverse repurchase operations Sex. On the 24th, the Bank of China issued a report stating that the deposit reserve ratio may still be reduced by 1-2 times during the year, but the possibility of continuing interest rate cuts is unlikely.

According to the analysis of the report, at present, China's economy has not shown signs of fundamental improvement, and the money supply has also been under pressure due to the continued decline in **. Therefore, the central bank's overall judgment is that policy adjustments will continue in the direction of relaxation. It is expected that the central bank will continue to release liquidity through open market operations, and reducing the RRR is still a high probability event. However, from July onwards, the expectation of a lowering of liquidity has often been frustrated. The reverse repurchase has become the only instrument for central banks to invest funds, and the pace of monetary policy relaxation has slowed down.

The pace of loosening policies has slowed down, and the expectation of lowering interest rates has weakened. This is not good news for the steel market. This means that before and after the 11th quarter, the capital side of the businesses will tighten, which makes the steel prices pull up. discount. Fortunately, in terms of inventory, steel traders also have some comfort.

According to statistics, as of September 21, the National Steel Social Inventories Index was 147.74 points, down 3.77% from the previous week, of which the building materials social inventory index was 159.28 points, down 4.34% from last week, the plate social inventory index was 138.69 points, It dropped 3.26% last week. At present, the decline in the national steel stocks has accelerated, which may be related to the steel mills intending to reduce the delivery to the market and trying to pull up steel prices. But no matter what, under the influence of rising steel prices in the previous period, under the psychological effect of buying up or not buying, the purchaser did increase purchasing, which also played a role in promoting the decline of inventory. I believe this should be the only one. Can support the recent rise in steel prices.

Taken together, the central bank reported that expectations of interest rate cuts have weakened, which makes sense, because the current market is that even if interest rates are cut, the stimulating effect on the market is limited, which may stimulate asset price bubbles such as the housing market. However, although the Central Bank has its reasons, the announcement of this news has caused the market to shake up. In the short term, the financial pressure on steel traders will continue to exist, but if the long-term perspective, the central bank predicts that during the year The reserve requirement ratio may still be adjusted downwards by 1-2 times. This is also good news for the investment projects that are currently under construction. Therefore, it is recommended that businesses should not be too pessimistic about the outlook.