After the May Day holiday, rebar futures and spot prices ushered in a “good start”. The recent frequent fluctuations in steel prices are not unrelated to the current “strong expectations” and “weak reality”. In the short term, the support of the future screw is weak. In the short term, it is not ruled out to continue the downward test. The next support level refers to the vicinity of 4700-4750. It cannot be ruled out that there will be a short-term rebound; but overall, the demand is weak, and the rebound may be limited.
It can be seen from the recent policies that the overall demand this year still has strong support, and it is difficult to see a sharp decline. Therefore, the demand delayed by the epidemic in the early stage is only postponed and will not disappear.
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Despite the good expectations, the overall steel demand has not been fulfilled very well until now, showing a state of “weak reality”.
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At present, it is mainly a game between macro and reality. The macro side is still positive. The Politburo meeting has made important arrangements for macro policies, capital, domestic demand, real estate, industrial chain supply chain, etc., and still has optimistic expectations for the recovery of demand after the epidemic. However, domestic and foreign demand continued to be shrouded by the epidemic and did not continue to increase, resulting in increasing domestic destocking pressure and increasing frequency of price shocks.
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