🔹 Market Recap

Yesterday marked the first trading day following the cooling of market optimism around “anti-involution” policies. A sharp reversal occurred across multiple previously oversold sectors: coking coal, coke, glass, soda ash, lithium carbonate, and industrial silicon all hit their daily lower limit, triggering significant capital outflows. This suggests that the recent valuation recovery in these sectors has largely been completed. Markets are now entering a minor consolidation phase.

🔹 Key Events This Week

There are three pivotal macro events this week that are likely to impact market direction:

  1. China’s Central Politburo Economic Work Conference – Focus remains on anti-involution messaging and whether incremental stimulus policies will emerge.
  2. U.S.-China Trade Talks in Sweden (Mon–Tue) – China’s official stance: “Engage with sincerity, hold the line.” The market awaits clarity on possible tariff compromises.
  3. U.S. Federal Reserve Rate Decision – Set for release at 2:00 AM Beijing time on July 31. The consensus expectation is for rates to remain unchanged.

In the lead-up to these events, steel futures are expected to remain range-bound, with low volatility.

🔸 Steel Market Strategy

Yesterday’s price action provided greater clarity on the trading range for steel. Rebar futures are now oscillating within a well-defined 50-point range, with support near 3,230 CNY/ton and resistance around 3,280 CNY/ton.

The market is in wait-and-see mode, awaiting the outcomes of trade negotiations and the Politburo meeting before deciding on direction.

From a strategic perspective, I believe:

  • The likelihood of strong new stimulus policies from the Politburo is low.
  • Trade talks still carry uncertainties.
  • The steel market is more likely to follow a stepwise downward consolidation trend in the coming weeks.

Strategy remains unchanged: Sell on strength (short at highs).

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