Stainless steel market volume is weak, downstream demand gradually weakens

On November 17, due to the weak US economic data, the USD trend was inhibited and LME nickel prices rebounded. LME Nickel Composites in London rose by US$310 over the previous trading day and closed at US$21,560. Inventories fell by 540 tons to 130,146 tons.

In the domestic market, LME Nickel rebounded slightly overnight. Concerns about the price trend in the domestic stainless steel spot market have eased. The spot price was basically the same as the previous trading day. Affected by the rebound of LME nickel, the stainless steel market sentiment gradually rebounded. All the main contracts of the China Stainless Steel Exchange rebounded. As of the end of the deadline, the CR1102 volume rose by 300 yuan/hand over the previous trading day. The latest price was reported at 23,580. Yuan/hand; 4 foot hot rolled contract 4FHR01 rose 510 yuan/hand over the previous trading day, with the latest price reported at 21,610 yuan/hand.

Judging from the current market transactions, the current domestic stainless steel market is lightly traded, and downstream demand is weak. However, even if the spot price remains relatively strong compared to Lonnie, the spot price remains strong due to the following two reasons: On the one hand, there is currently a shortage of market resources, especially the stainless steel mainstream specification products produced by TISCO Stainless are scarce, even part of Large-scale traders’ inventory resources are also stretched, and there is news that the short-term situation in which spot resources will be difficult to supplement will continue. On the other hand, despite the recent sharp fluctuations in LME nickel, the ex-factory price of the stainless steel agreement remains strong, and the current TISCO stainless agreement The ex-factory price is as high as 25,220 yuan/ton, which is relatively large compared to the spot price of 23,900 yuan/ton, which makes the purchase cost of traders high, and plays a strong supporting role for spot prices.

Judging from the current price trend, with the rapid decline of Lumnick nickel, the market's bullish atmosphere has been hit hard. But I believe that if the current metal market has entered the bull market it is too early.

Although the market has expectations of a rate hike and inflation does need to be curbed, the process of currency tightening is a dynamic process. It cannot be achieved easily by raising interest rates one or two times. According to the statistics of relevant agencies, the current domestic broad currency circulation is as high as 69 trillion ***, which is more than 40 trillion yuan above normal, and so much liquidity can be fully recovered in the short term. According to statistics from the Bureau of Statistics, household savings in October decreased by 700 billion yuan from the previous month, indicating that there is currently a large amount of liquidity entering the investment market.

There are indications that the current bull market fundamentals are changing. Although the current stainless steel fundamentals are relatively weak, financial attributes will continue to support the strong spot price of stainless steel in the coming period.