The current spot market for steel will still go through an inventory of the process, inventory, record high steel prices will curb the rapid rise in the short term, but with the second quarter demand for the rapid release of the cost of iron ore will be possible to stimulate conduction effects steel into this year's first rise cycle.
Since the end of last year, 11 since the main contract to stay in the 1005 contract of 3 months has now been transferred to the 1010 contract. Rebar futures market continues to present leap out of the process of change on the one hand, that rebar futures market is not yet mature, on the other hand also shows that markets are more optimistic about long-term prices. Each month contract but is far better than in recent months of contract a certain level of premium, which is very unreasonable. From a historical fluctuation of steel prices can be seen in each of the cyclical fluctuations in steel prices will appear, rather than size-fits-up, which also brings good business for the stock market arbitrage opportunities. In my opinion, Shanghai spot market prices of three rebar weighing the short term will still be in the vicinity of 3900 oscillation; into the second quarter, the steel prices will rise into the channel.

First, the price of iron ore to steel there is a lag of conduction

Although ore inventories at a high ore market transactions are not very active, but the ore market prices remain steadily. Qingdao Port to the current price of 1050 yuan / ton, an increase of 61.5%, and in August 2007, September 2008 the prices of similar. The data from the next graph you can see two phenomena: First, the history taken in the price of ore at a time when the level of 1,000 yuan, the current steel prices is relatively low, mainly with the market demand in March has not been fully Performance out of a relationship. Second, in August 2007 before the fall of ore and steel prices at the same time, into a rising cycle of process, and in September 2008 until ore prices and steel into a down cycle process. Steel than the price of mine up or down with a lag, in which there is a conduction process. In other words, when the sharp rise in ore prices, the steel prices will not rise immediately because of rising costs, while the ore prices fall, the steel prices are not falling because of the cost to drop immediately. Therefore, ore prices from the point of view, the current steel prices are fairly low, the price of ore transmitted to the demand for steel needs further pulled up, while the short term for the steel it will be an oscillating bottom to lead to energy savings process.

Data show that, as of last weekend, major cities in the national market of 7.39 million tons Rebar Stock, an increase of 72.07% over the previous week increased by 20 million tons of wire rod of 2.33 million tons, an increase of 35.38%, compared with growth of 114.5 thousand tons the previous week , to the highest point in recent years. However, nearly 4 years of historical data of the statistical point of view, a turning point in March to enter the probability of stock as high as 75%, while the decline in the second quarter of the monthly probability of 100%, indicating that the recovery has already begun to demand more than steel factory production, which is in the second quarter will show the steel demand is greater than the supply situation. Currently steel mills have already started to decrease inventory and began to move into the distribution channels, this is also the recent market statistics, one of the reasons high inventory. With the demand for the recovery of the three mid-to late into the Steel City will go to stock-based process, in April of this phenomenon will become more apparent.

Third, steady growth in demand for infrastructure, real estate demand will not drop

This year investment in infrastructure is also a certain extent compared with 2009 increased, Ministry of Railways published data showed: in 2010 the total fixed assets investment scale of the whole path of 823.5 billion yuan, of which 700 billion yuan investment in capital construction, compared with an increase in 2009 100 billion. Based on data projections, infrastructure quantity of steel in 2009 on the basis of an increase of 16%. Therefore, the infrastructure in 2010 steel demand will grow steadily.

In the real estate industry, the recent official information on the curb housing prices are more frequent. February 27, Premier Wen Jiabao stance is determined to remain in office, house prices at a reasonable price. Minister for Housing and Urban-Rural Construction Jiang Weixin said recently: The next step would be a more refined series of measures to curb rising prices. The "two sessions" period, said Jiang Weixin, once again this year is the supply of funds, including new bank loans, the state plans to decrease from last year, it has to a certain extent, the demand for housing have some impact. In all aspects of the position can be seen, the state regulation of prices this year will definitely increase the intensity. It also enables the development of the real estate market this year is not good, and thus cast doubt on this year's steel demand. However, I believe, only in real estate prices go up or down to measure the developing trend of irregularities, the decline is affecting real estate prices started their enthusiasm, but it should be noted that the government curb housing prices is not intended to deliberately suppress the normal room price. The Government will not deal with high prices across the board, eventually market instruments through regulation, in order to avoid the property market, "hard landing." Therefore, the Government will be on the one hand curb speculative housing and property developers hoarding land to increase the supply of land on the other hand, a substantial increase in security of supply of housing and common commercial housing, making housing supply on the market increased, thereby reducing the housing scarcity. In my opinion, from the full year, as long as the supply of land remain stable, an area of housing starts this year, and will not be much impact, on the contrary may also happen a certain level of growth.