🔹 Market Overview
This morning’s macro calendar features two events of interest:

  1. 9:00 AM – LPR Adjustment: If the Loan Prime Rate (LPR) is cut by 10 basis points as expected, the impact is likely limited, as the market has largely priced it in.
  2. 10:00 AM – NDRC Press Conference: Watch for potential policy signals related to real estate, infrastructure, special-purpose bonds, and output curbs. Timely interpretation will be shared once the briefing concludes.

🔸 Technical Analysis
Rebar futures showed open interest expansion amid falling prices, with volumes shrinking — a clear sign that bearish capital is currently in control. The continued buildup of short positions in the night session reinforces this bearish stance.

The pattern of declining prices on lower volume indicates weak resistance from bulls, suggesting further downside risk. Focus should be on the key support levels at ¥3030 and ¥3000. A break below these could trigger stop-loss exits from long positions and lead to accelerated declines.

🔸 Key Observations

✅ Bearish Dominance:

  • Bears have clearly favored rebar as their primary short allocation vehicle, as seen in sustained OI gains during price drops.
  • Hot-rolled coil (HRC), on the other hand, is experiencing declining open interest, suggesting that some bearish sentiment may already be priced in. Further downside in HRC may require fresh spot market weakness as a catalyst.

📊 Short-Term View
The market remains in a weak consolidation phase, with a continued downward bias. Until bulls regain control or macro catalysts shift sentiment, the path of least resistance remains downward.

🔹 Strategy Suggestion:
Maintain a Bearish Bias on Rebar — Short opportunities remain favorable unless strong support holds or a shift in fundamentals occurs.

⚠️ Watch Closely
Pay close attention to policy updates this morning. Any surprise stimulus targeting demand-side sectors like real estate or infrastructure could temporarily disrupt the bearish trend. Otherwise, continued weakness remains the base case.

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