🔹 Market Analysis:

1️⃣ Price Action & Volume:

  • Rebar surged with heavy liquidation, dropping 145,000 contracts, followed by an additional 11,500 contracts lost overnight.
  • Key takeaway: The price rise was fueled by short-covering, not fresh buying, indicating weak conviction behind the rally.

2️⃣ What’s Driving This Move?

  • Shorts closing positions after a fierce battle, driven by fundamental data and policy expectations.
  • No clear trend reversal yet—market remains within a broad consolidation range.
  • Strong resistance ahead:
    • Rebar: 3300-3350
    • Hot-rolled coil (HRC): 3450-3500
    • Expect heavy selling pressure from hedging flows if prices approach these levels.

🔹 Key Factors to Monitor:

1️⃣ Open Interest & Price Action:

  • If positions increase alongside rising prices, an extended rally may develop.
  • If positions keep declining, it signals a fading move with limited upside.

2️⃣ Spot Market Demand:

  • Can the strong demand recovery sustain its momentum?
  • Are financial conditions improving for steel traders?

3️⃣ Policy Developments:

  • Rumors suggest a production cut policy announcement on March 15.
  • If true, this could trigger significant volatility—waiting for confirmation.

🔹 Trading Strategy:

✅ Short-term: Sell near resistance levels (3350 for rebar, 3500 for HRC).
✅ Medium-term: Monitor policy signals before committing to new positions.
🚨 March 15 is a key date—stay alert for official production control measures!

📌 Daily insights provided by LangZo Steel. For reprints, please credit LangZo Steel.