After July, domestic steel prices continued to fall. According to the monitoring data of Langer Iron and Steel Network, as of August 12 this year, the comprehensive steel price index was 147 points, down 4.9% from July 2, and the long-term steel price index was down 7.6%. In the same period, the closing tonnage of main contracts for Shanghai threaded steel futures was 3677 yuan, down 10%. Looking ahead to the market of steel products, it is bound to rebound from the bottom after the fall. Generally, there will be no one-sided fall, breaking the two-way wide oscillation pattern.

Recent steel market volatility downward, the reasons are more obvious:

First, higher profits stimulate iron and steel enterprises to actively increase production. Taking threaded steel as an example, at the beginning of July this year, the spot price of threaded steel in China exceeded 4000 yuan, and the profit per ton of steel was hundreds of yuan, which stimulated the iron and steel enterprises to increase production actively. According to the monitoring data of Langer Iron and Steel Network, as of August 2 this year, the blast furnace start-up rate of 100 small and medium-sized steel enterprises in China was 81.3%, which was 8.6 percentage points higher than the previous low point (March 29 this year). Combined with the increase of advanced production capacity, the crude steel output in the first half of this year increased by 9.9%, close to the double-digit level, thus increasing the market. Field supply pressure.

Second, the speculative climate has risen and the social stock of steel has increased. In the first half of this year, the national steel market continued to rise, and the rule of "buy up or not buy down" increased market speculation. Finally, some traders began to hoard supplies, which made the recent steel social inventory level significantly increased. According to the monitoring data of Langer Iron and Steel Network, as of August 9 this year, the national steel social inventory was 11.587 million tons, an increase of 17.311 million tons compared with the previous low (June 6, 2019), an increase of 17.6%. Social stock level is an important indicator affecting the market. Although the increase of social stock of more than 1 million tons of steel is not much compared with the increase of crude steel of more than 440 million tons in the same period, nearly 20% of the increase and the "inflection point" of turning to rise still leave a shadow of the market and impact on market participants. Psychological atmosphere.

Thirdly, steel prices break through the "ups and downs" line, and market participants'risk preferences change. The author believes that the large pattern of the national steel market in 2019 is wide fluctuation, and there is a "median line" between the fluctuation of prices. For example, this year's "median line" of the main contract price of threaded steel is about 3700 yuan. This median line can also be regarded as the "ups and downs line". When the price level is higher than this 3700 yuan line, there will inevitably be downward adjustment pressure. The higher the price is, the greater the downward adjustment pressure will be, and the stronger the downward trend will be. Conversely, when the price is below the 3700 yuan line, there will inevitably be a demand for market rebound. The lower the price is, the stronger the demand for rebound will be, and the stronger the rebound will be. In the previous period, steel prices across the country have risen sharply, with the closing ton price of the main threaded steel contracts reaching a maximum of 4093 yuan. Under the sub-price, the risk preference of most market participants has changed significantly, from profit to bad. Influenced by its operation, the market of course has to adjust downward.