🔹 Key Summary:
Steel futures saw a sharp rebound on April 23 following a surprising shift in U.S. tariff expectations. While the rally appeared strong on the surface, underlying data points to short-covering rather than true bullish conviction. The macro trend remains weak, and traders are advised to maintain light positions ahead of the Politburo meeting.

🔸 Key Market Drivers:

1️⃣ Tariff Sentiment Reversal from Trump:
A sudden change in Trump’s stance sparked optimism—he hinted at potential tariff reductions, triggering broad commodity strength.

  • Rebar & HRC futures surged ~2% (approx. 60 points)
  • Iron ore rallied 2.32%
  • Coking coal & coke led with +4.21%
    The strongest bounces came from previously oversold contracts.

2️⃣ Technical Picture – Bullish Candle, Shrinking Open Interest:
A “bullish engulfing” day was printed on daily charts with increased trading volume. However, open interest fell slightly across products—indicating the rise was driven more by short covering than aggressive new buying. Sentiment has improved, but not decisively.

3️⃣ Basis Snapback – Momentum Capped:
With the basis (spot–futures spread) sharply corrected, the valuation gap has narrowed. This limits further upside unless new bullish drivers emerge. The market is likely to oscillate near-term.

🔹 Strategy & Outlook:
• Trend remains fragile—macro fundamentals haven’t changed.
• Pre-Politburo expectations may hold the market up short term.
• Stay defensive: no chasing highs, wait to fade rallies from strength.

🔸 Bottom Line:
• Expect high-level choppiness before major policy clarity.
• Hold light positions and avoid aggressive trades pre-meeting.
• True direction will emerge only after macro signals are clear.

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