The market fundamentals of stainless steel valves have improved
The market fundamentals of stainless steel valves have improved. Commodity futures, represented by iron ore and stainless steel, performed quite impressively in March. Capital inflows have surged, all of which have set a new record of one-day trading. For the large influx of funds in the futures market, the stainless steel market has abundant liquidity due to the relatively loose credit at the beginning of the year. Prior to this, the divergence of the market towards the late stage of the stock market increased, resulting in capital outflow to the commodity market; and since the beginning of the year, commodity prices in the international market have generally risen. Domestic policies of capacity removal, inventory removal and steady growth have strengthened the expectation of improvement in supply and demand of the stainless steel valve industry, making the market bullish, and funds are more favored for black goods in price depression.
However, from the perspective of futures market transactions alone, the black varieties of futures market have shown signs of excessive speculation, and should be vigilant against the accumulation of market risks. Prior to that, the ratio of stainless steel futures volume to positions was less than twice as large as most of the time. During the same period, some other black futures also showed similar characteristics.
Generally speaking, trading position ratio refers to the ratio of trading volume to holding volume. Day trading is more active. Trading volume of stainless steel valves and other industries will be larger than holding volume. If the turnover is less than the position, it shows that the mainstream of on-site funds is long-term, which is a very rational and mature reflection of the market. However, if the turnover is several times of the position, it means that on-site capital transactions are frequent. Generally, it is reasonable to maintain a trading position ratio of 2-3 times, and excessive multiple shows signs of excessive speculation.
The market fundamentals of stainless steel valves have improved, but the supply and demand situation has not been reversed. In the short term, market sentiment is optimistic. Speculative funds have contributed to the surge of stainless steel prices and mineral prices.
The huge risk of price fluctuation makes the management risk of stainless steel enterprises more difficult, and the distorted price signals may lead to mistakes in enterprise management decisions. If the follow-up data of the fundamentals can not be falsified, there may be a deep adjustment in the surge of black varieties in the current futures market. In addition, the current market pattern of stainless steel oversupply and de-inventory still exists, and the sustainability of the recovery needs to be verified.
The rebound in the commodity market is due to the overlapping expectations of the market brought about by the supply-side reform on the basis of the expected growth in the spring consumption peak season. Meanwhile, the easing of monetary liquidity in the first quarter has made capital markets abundant, creating a monetary base for the rebound in commodities. However, neither money nor production expectations can change the current situation of overall consumption weakness. Therefore, the rebound of stainless steel prices must be positioned as a rebound market, and the conditions for overall reversal are still inadequate.
With the rising price of stainless steel, it will inevitably lead to the loss of profits in the earlier period of production reduction and resumption, and increase the utilization rate of production capacity. In the context of weak consumption, the imbalance between supply and demand will be difficult to change or even aggravate.
In addition, industry insiders believe that supply-side reform will improve the overcapacity of stainless steel valves and lay a new industrial foundation for the next round of economic growth. However, if there is excessive speculation in the capital market, continuously pushing up the price of stainless steel will make the supply and demand pattern worse again.