Wang Jianhua : The China Steel Market is Expected to Usher in a Deterministic Rebound in July

In June, the steel market showed a differentiated operation. First, futures were stronger than spot. The futures continued the rebound at the end of May in the early ten days. The maximum rebound of the threaded 2110 contract reached 704 points, which was in line with the forecast of at least 700 points of rebound in the report at the end of May. The spot trend was basically downward, and the steel comprehensive price index fell 261 points. Second, iron ore price is stronger than finished product price. 62 % Australian powder CFR prices rose by 20 points ( dollars ). Third, the price of coking coal is stronger than that of coke. The price of main coking coal in Lvliang rebounded by 100 points, while the comprehensive price index of coke fell by 32 points. However, coke only fell for one round, and then rose again. Fourth, scrap price is stronger than finished products, scrap price index rebounded 184 points.

Looking forward to July, the demand is expected to improve.

The continued rebound in leading indicators indicates that demand is expected to improve in the future.

June 25, China ' s export container freight index 2591.41, continued to record the highest level. The Baltic dry bulk index has rebounded again to close to its previous high of 3255 since its high for more than a decade ( 3266 on 5 May ) to 2420 ( 8 June ), suggesting that future demand is expected to rise. Markit 's manufacturing PMI hit a record high of 62.6 in June, with Markit 's service PMI slightly falling to 64.8. The eurozone 's manufacturing PMI exceeded expectations by 63.1, its service sector PMI continued to rise to 58 last month. Overall, the manufacturing industry in Europe and the United States maintained a high momentum, and the service industry continued to recover. Thus, China 's exports in July remain an important support for economic growth, both direct and indirect exports of steel will remain good. However, the economic growth of Britain and Japan has slowed. The manufacturing PMI index released at the end of June is still in the expansion range of 50.9, with a decline of only 0.1 percentage points from the previous month, while the new order index of 51.5 is still in the expansion range, with a rise of 0.2 percentage points from the previous month and a rise of 0.7 percentage points from the previous month. From the perspective of new order index and production index, one increase and one decrease indicate that the future inventory pressure will be further reduced.

The demand caused by the shutdown of the commemorative activities has restarted to release.

At the end of the semi-annual capital exam, some funds entered the replenishment.

Speculative trading activity increased, intermediate demand increased.

In short, in July, although the fundamentals of the steel market are still under pressure, once the relevant policies on production restrictions are implemented across the country, the fundamentals will gradually improve, and steel prices may usher in a definite rebound. It is suggested that the arbitrage strategy of high altitude iron ore should be actively arranged while making more products at low altitude.