Don’t panic too much, the U.S. interest rate hike will have limited impact on steel prices
The actual steel market evolution rhythm path is very clear, it is still the adjustment relationship between supply and demand under the environment of external anti-inflation and internal stabilization of the economic dual-line environment.
Due to the influence of the overnight US CPI data, the black futures collectively fell overnight, and the thread opened lower and moved lower, resulting in a cold market transaction and a decline in prices today. The bullish atmosphere in the market has cooled since before the Mid-Autumn Festival.
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The Fed has repeatedly released a firm pace of interest rate hikes, but the market has indeed repeatedly hyped the impact of interest rate hikes, causing the chasing behavior to be hurt. The Fed is likely to raise interest rates by 75 basis points in September. Affected by this, U.S. stocks, crude oil, and some commodities, together with domestic black commodities, fell one after another. However, from the perspective of market changes, the market fell mixed with emotional market. Although the spot price fell in some areas, the range was limited. In other words, the price decline that started yesterday has little to do with fundamentals, so don’t panic too much.
Judging from market conditions, the fundamentals have not yet reached the point of being overly optimistic. The overall market transaction has cooled down today, and the transaction volume has dropped significantly. On the one hand, there is a certain amount of stocking before the holiday, and the purchasing rhythm lacks continuity; on the other hand, the improvement in demand is not strong, and the price rise encounters downstream resistance.
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In general, the market is in a situation where demand is improving slowly and external influences are increasing. The market adjustment brought about by weak market sentiment is inevitable. After the expectation of US interest rate hike is digested, it will still follow the logic of stable domestic growth and stronger supply and demand, and it is expected to decline slightly. There is still a chance for a rebound after the adjustment.
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