Since the opening of the market this year, the slope of the decline in steel prices in the entire market can be described as shocking. It is hitting new lows almost every day. This decline and speed have not been seen in more than half a year. Compared with the rapid decline at the beginning of last year, this year's price reduction seems to have come earlier. Looking into the reasons, the delayed release of demand has become the anchor point for price decline. At the same time, the spot compensation for the decline after futures led the decline also indicates that the market has entered an emotion-dominated stage. First, this year's cold wave has affected the release of some demand, with freezing rain in the south and low temperatures in the north. With the end of the conference and the subsequent promotion of safety work expectations, rain and snow weather to conference safety have affected the progress of the construction period, and demand is currently suppressed. The second is the construction schedule of the terminal project and the constraints of project funds, which are key factors that affect the intensity and pace of demand release. Judging from the data, as of March 12 (the third day of the second lunar month), the resumption rate of 10,094 construction sites nationwide in the Centennial Construction Survey was 75.4%, a year-on-year decrease of 10.7 percentage points; the labor employment rate was 72.4%, a year-on-year decrease of 11.5 percentage points; The funding rate was 47.7%, an increase of 3 percentage points from the previous month. Among them, the resumption rate of non-real estate projects was 78.1%, an increase of 12.4 percentage points from the previous month; the labor service rate was 73.9%, an increase of 15.6 percentage points from the previous month; the funding rate was 50.1%, an increase of 2.6 percentage points from the previous month. The resumption rate of real estate projects was 68.2%, a month-on-month increase of 13.1 percentage points: the labor service rate was 68.1%, a month-on-month increase of 13.0 percentage points; the fund availability rate was 41.0%, a month-on-month increase of 4.5 percentage points.

The current black decline slope is relatively high, so you need to be cautious when chasing short positions. Some short positions have taken profits and become short covering markets. By mid-March, speculative short sellers will not organize resources for market delivery, but will inevitably reduce their positions, move positions to another month, and wait for new contradictions in the market to appear. Therefore, it can be clearly seen that these two days have been a trend of lightening up and rising. However, as the futures market rebounded, the pessimistic atmosphere in the spot market has eased. There have been phenomena such as covering short orders in the spot market, small replenishment in the downstream, and traders buying the bottom to increase the average price. The market speculative atmosphere has picked up and the trading atmosphere has been active.

At present, the market is still in the process of adjustment. It is worth noting that whether the expected market demand can continue to improve is key. If there are no incremental funds to push up the market, it will be difficult to form a reversal, and the rebound may lack sustainability. With the recent market boom in the issuance of special local government bonds and special treasury bonds, funding will improve in April, and demand is expected to improve. However, special attention should be paid to the persistence of demand. If the demand is only pulse-like, the rebound market will not last long. It is expected that the movement of positions in black May will accelerate in the future, and the market will fluctuate and adjust. However, the weak mid-term trend did not lead to short-covering due to early short-selling, and the sustainability of the rise remains to be seen.

All above is from：https://gc.mysteel.com/