Recent steel price movements, often seen in the current period of departure, the author believes that this is mainly due to shorter futures into the market, the spot price of market-dominant pattern has not yet changed.
As the launch of steel futures Soon afterwards, the market power of small price fluctuations to a lesser extent, depending on whether the favorable trend of good messages. Statistics show that, in addition to the first day of listing, the rebar futures price is 3663 yuan the highest, the lowest price is 3436 yuan, up and down space for only 227 yuan, total volatility is only about 6%. In addition, the 27 trading days, excluding the first day of fall mostly in the outer screw up less than 1%, of which up 1-2% decline in only two trading days, in the 2-3% only four trading days. Change is not a trading day by more than 3%. Quotes of the reasons that would affect the past few days, mainly Baosteel cut prices sharply, and the second round of economic stimulus package, a quarterly macroeconomic data for the better, iron and steel industry policy. In addition, the steel futures market itself to its role in promoting smaller price movements.
From the period of the relationship between the current price of view, the short time the futures into the market, the spot price market-dominant pattern has not changed. At present the entire steel industry is in a relatively slow period, the steel prices in the enterprise hovering near the breakeven point, we can say is in a bottoming period, continue to dip, less likely. Therefore, iron and steel enterprises, in the current price level, the right to sell iron and steel enterprises have done the meaning of hedging is not obvious. For traders, that the extension of the past 20 years is difficult to change in trade patterns, coupled with the current pricing, or to steel pricing, traders on this basis, the main way to increase sales, a view does not affect the spot price of pricing, it does not touch the core interests of traders, they are steel futures sidelines.
And the colored variety is different is that steel futures delivery of goods to be within the expiry date, that is, the date of manufacture to the Closing Date Otherwise more than 3 months, that is, the immediate production of steel products can not be the first contract for delivery of steel 0909 the earliest products in June of 0909 contracts in order to delivery, combined with iron ore negotiations are yet to be completed, in this context, iron and steel enterprises and traders involved in hedging risk. This may also view the current price is less interaction, the transaction is not active in causes.
In the long run, excess capacity will be the resistance of steel price increases, but the short term, affect the price of iron ore negotiations are the key. China's steel production capacity of about 660 million tons, if coupled with Fangchenggang and Zhanjiang Harbor in the construction of large-scale iron and steel projects, the final production capacity will be more than 700 million tons. China's crude steel in 2008 actual production of 500 million tons, direct and indirect exports of about 1 million tons of real gross domestic effective demand, only 4 million tons. Clearly, the domestic steel overcapacity situation which would be a long period of constrained steel spot prices.
In comparing the current iron ore talks are at a sensitive time, "iron ore surplus, prices should fall" has become the consensus of both supply and demand, but a larger decline in the differences. The author believes that the domestic steel companies is expected to decline 40% -45%, higher than expected if the final decline, steel prices will fall; if it fell less than expected, will push steel prices up.
It is worth mentioning that, although the domestic steel futures open interest has grown rapidly and currently has listed at the beginning of seven times, but more and more mature copper is still quite small. China's annual consumption of approximately 4 million tons of copper, and the present positions are more than 40 million in hand, the equivalent of 2 million tons (5 tons / hand). If the steel futures figure of 2008 a total of thread and wire consumption 180 million tons, then the position will reach 9 million in hand (that is, 90 million tons), if calculated according to consumption of 400 million tons, then the steel will reach 20 million in hand position (ie, 200 million tons). Therefore, the future development of steel futures is still great potential.