Influencing factors of steel market
5-year LPR quotation is expected to decrease
On December 5, 2022, the deposit reserve ratio of financial institutions will be reduced by 0.25 percentage points. After the implementation of this reduction, the average weighted interest rate of newly issued personal housing loans in October has dropped to 4.3%, and the interest rate of multi land housing loans has dropped to near the lowest value determined by the five-year LPR quotation. The probability of the 5-year LPR quotation decreasing in December has increased significantly.
Analysts' view: As the end of the year is approaching, due to the epidemic and the downturn in global economic development, the achievement of various domestic economic goals is not ideal. The Ministry of Industry and Information Technology, the Central Bank and other departments have issued a package of policies to restore economic development. In particular, the RRR reduction policy has enhanced the ability of commercial banks to provide credit. Therefore, the liquidity of real estate enterprises is expected to improve. In addition, the RRR reduction will bring additional medium and long-term funds and release more liquidity, It also signals the continuation of loose money, and the interest rate of housing loans is expected to further decline. The liquidity of market funds was increased, the demand for steel was expanded, business confidence was boosted, and steel prices were improved.
Cold wave, rain and snow are coming
At 06:00 on November 28, the Central Meteorological Station continued to issue the cold wave orange warning: from November 28 to 30, the cold wave weather will affect the central and eastern regions of China from north to south, resulting in severe cooling, strong winds, sand dust and extensive rain and snow weather. The temperature in most parts of the Middle East will drop by 10~16 ℃ successively, and the temperature drop in some areas can reach more than 18 ℃. After the cold wave cools down, the 0 ℃ line of the lowest temperature before and after December 1 will push the south to the north of Jiangnan to the south of Guizhou.
Analyst's opinion: In winter, due to the cold wave, the temperature in the north has dropped again, the progress of outdoor construction projects has been hindered, and the logistics transportation has become more difficult, the flow speed of market goods has slowed down. In addition to the impact of the epidemic situation, the downstream terminal steel consumption has stopped and tended to fall back. Until the winter storage policy is not very favorable, the demand will remain low and the steel price will be suppressed.
