Steel prices are expected to slow down after a continuous pull up

In global markets, the minutes of the Federal Reserve's June monetary policy meeting released early Monday showed that Federal Reserve officials were divided on the timing of the tapering of bond purchases. The three major indexes in the U.S. stock market all closed up slightly.But it is worth noting that the regular meeting of the rare mention of "RRR", so that the market is looking forward to monetary policy in the second half of the year, macro positive, steel prices have been supported.

Let's have a look at today's market quotation:

Phase steel continues to strengthen, spot continues to follow up

Steel futures continued to strengthen today, but the gains were limited, the upside was blocked, futures snails up 53 to 5393, futures coils up 81 to 5750, iron ore down 36 to 1187.5, coking coal down 101.5 to 1830.5, coke down 139.5 to 2471.5.

In terms of spot, today's market turnover is general, mainly low price procurement, and most of the merchants' quotations are still rising with the futures:

Rebar 24 markets rose 20-100, 20mmHRB400E average price of 5054 yuan/ton, an increase of 63 yuan/ton compared with the last trading day.

Hot coil 23 markets out of 24 markets up 50-150, 4.75 hot rolled coil average price of 5615 yuan/ton, an increase of 86 yuan/ton compared with the previous trading day.

Among the 24 markets on the board, 21 markets rose 30-100. The average price of the 14-20mm board rose to 5467 yuan/ton, 64 yuan/ton higher than the last trading day.

The regular meeting of the People's Republic of China will signal "RRR cut"

An executive meeting of the State Council, China's cabinet, on July 7th included a rare mention of "RRR cuts", in addition to plans to further boost medical services.Meeting decision, "against rising commodity prices influence on enterprise production and management, to insist on not to flood irrigation, on the basis of maintaining stability, enhance the effectiveness of monetary policy, timely using the monetary policy tools such as drop must further strengthen financial support for the real economy, especially in micro, small and medium enterprises, promote the comprehensive stability of the cost of financing."

It has been a year since the last regular meeting of China's central bank explicitly mentioned "RRR" cuts, and the rare re-mention sent a signal to the market that monetary policy may be moderately loose in the second half of the year.Even if it will not implement a comprehensive RRR cut, it is also expected to target small and medium-sized enterprises for directional RRR cuts, macro positive boost, help to continue to support the trend of steel prices.

Recycler pressure slowed down and apparent demand picked up

On Friday, the increase of inventory of major varieties slowed down, and the output decreased by 106,200 tons. The total inventory increased by 112,200 tons this week, slower than last week. Specifically, the society continued to increase by 296,300 tons, but the factory inventory decreased by 177,100 tons, and the apparent demand increased by 210,000 tons compared with last week, reflecting a recovery in demand and a slowdown in inventory pressure.Steel orders pick up, help support steel price trend.

The weekly production of blast furnace and electric furnace rose from month to month

With the recent rise in steel prices, steel production power enhanced, according to the data monitoring shows that the domestic 106 steel mills 313 blast furnaces, this week the operating rate is 77%, although the month-on-month decline of 1.28%, but the weekly month-on-month rise of 6.39%.At the same time, incomplete statistics of nearly 30 domestic electric arc furnace steel mills, this week the operating rate of 77.27%, an increase of 3 percentage points compared with last week.If there is no significant decline in steel production, demand is still in the off-season background, the subsequent support for steel prices will be relatively limited.

To sum up, the macro release of "RRR" signal, good to push up.From the point of view of supply and demand, this week with the rise in steel prices, buy up not buy down mentality to increase the speculative demand in the market, the pressure to slow down, but from the blast furnace and electric furnace operating rate, steel production power to strengthen, steel prices after a continuous pull up, is expected to rise will slow down, stable tomorrow.