On September 24th, with the holding of press conferences on China's financial support for high-quality economic development and the launch of multiple heavyweight policies, A-shares, Hong Kong stocks, and the renminbi surged across the board.
The first three quarters of China's national economy were all trumpet style propaganda, with loud thunder but little rain. Now it has turned into real bullets and real stimulus policies. Don't doubt China's determination and confidence in this. With the changes in the foreign environment, entrepreneurs in China can finally be completely liberated from their hands and feet, allowing everyone to work hard and expand. Steel prices are expected to continue to rise, possibly until mid to late October.
In October, the Chinese steel market still has room for rebound with the positive policies exceeding expectations. Macro policies are the catalyst for trading and the main line of trading. As long as the policies are not fully implemented, expectations will continue, emotions will not reach a climax, and price rebound will not end. If there is pressure on the steel market in October, it is only due to a temporary price rebound that is too fast and significant, triggering technical adjustments, and emotional pressure caused by exceeding expectations of resuming production. However, these are only disturbances and cannot change the short-term rebound trend.
Federal Reserve Chairman Powell stated on the 30th that the continuous decline in inflation rate and stable growth in the job market are expected to synchronize, implying that the Federal Reserve will continue to cut interest rates. Meanwhile, the market expects the possibility of the Federal Reserve cutting interest rates by 25 basis points at its November meeting to rise to 62%. As of December, the probability of the target range for the federal funds rate falling between 4% and 4.25% is 50.3%.
From the perspective of industrial fundamentals, there is both practical support and expected benefits, and a good fundamentals are an important cornerstone for the continued rebound of steel prices. Overall, the steel market in October will usher in a rare golden period for the whole year, and steel prices will have a certain further oscillation and rebound performance. Most varieties will rebound more than the rebound stage in the first half of this year, and steel mill profits will also be repaired.
