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Steel futures will be shaken bottoming steady repair

First, the impact of the outbreak will eventually be lower than expected. With time, the accumulation of clinical experience, the advancement of scientific research and the strengthening of people's awareness of protection, people's fear of the virus will be quickly alleviated. That is, the most pessimistic time for the market must be the first moment, that is, the first trading day of the futures open. With highly leveraged capital markets to enlarge this sentiment to the limit, the later market will slowly correct this super-expected sentiment, or even do not rule out the emergence of above-expected repair market.

Second, the combined impact of the delay may not be very large. Deferred construction is the inevitable result of epidemic control, but the delay edgy may not have a more than expected impact on the market. The reasons are as follows: First, there is uncertainty about the timing of the delay. From the current information, many places limit the earliest start date, on the one hand, such administrative measures have relatively low legal effect, lack of strict implementation of the basis; These restrictions are adjusted in due course due to changes in the outbreak, and therefore lack of time rigidity. Second, the intensity of the previous year's start-up is generally relatively low, this year's delayed start-up period generated by the demand gap may be lower than market expectations. In previous years, downstream usually started after the Lantern Festival, because of funds, weather and other reasons, the project generally in mid-March around the real peak demand. This year's delayed resumption of work, the intensity may exceed expectations, does not exclude some extent to offset the delay period generated by the demand gap. Third, the pessimism generated by the delay in the start of construction has been reflected in the futures price, or even exceeded expectations. This means that further fall space for futures is greatly compressed. Spot traders also have some expectations for late demand, although the short-term pressure on funds, but also more difficult to appear a sustained phenomenon of ultra-low-price delling.

Third, after the outbreak, the construction industry will play a more important role in the economy. Affected by the outbreak, consumption and net exports in the first quarter were inevitably hit, and the economy relied more on investment and government purchases to bottom up, both of which were the biggest destinations being real estate and infrastructure construction. Basic can be determined that, with the epidemic continues to achieve a stage victory, macro-level, the counter-cyclical control measures will be introduced one after another to support the rapid progress of major projects; Therefore, the steel market after the outbreak is more worth looking forward to.

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