🔹 Market Focus

Following the recent noise around Tangshan’s environmental output cuts, market attention has now shifted to expectations of a potential “Supply-Side Reform 2.0.”

Investor sentiment has become increasingly polarized, with a clear divergence between bullish and bearish outlooks.

🔸 Bullish Arguments

  1. Policy Expectations:
    • Anticipation of key political milestones such as the late-July Politburo meeting and the early September military parade, which could bring pro-growth or industry-supportive announcements.
  2. Seasonal Factors:
    • The traditional off-season is ending, and demand may pick up in the coming weeks.

🔸 Bearish Arguments

  1. Weak Demand Side:
    • Core demand sectors — real estate, infrastructure, manufacturing, and exports — remain under pressure, showing little sign of meaningful recovery.
  2. Strong Supply Side:
    • Steel output remains high, exacerbating the risk of supply-demand imbalance.

🔹 Our View

We lean toward a bearish interpretation:
The recent rally is likely a technical rebound, rather than the start of a sustainable uptrend. We still see room for further downside in the medium term.

That said, it’s essential to recognize the psychological impact of floating losses in leveraged futures trading. Managing risk and trade conviction becomes especially important during choppy, uncertain phases like the current one.

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