🔹 Market Overview
Domestic policy signals remained muted as the NDRC’s latest press conference offered no incremental stimulus, keeping market sentiment largely unchanged.

On the global front, Japan’s government bond issuance saw poor demand, with yields surpassing 3.5%. This triggered a surge in gold prices as a safe-haven response. However, this development has limited direct impact on ferrous markets.

🔸 Basis and Technicals
Strengthening basis levels in both rebar and hot-rolled coil suggest that current pricing does not favor further near-term downside. Spot markets are holding relatively firm, signaling a lack of immediate downward pressure.

From a technical standpoint:

  • Iron ore remains relatively strong,
  • Coke and coking coal are showing weakness,
  • Finished steel (rebar and HRC) is seeing position reduction and light volume,

These mixed signals point toward a high probability of short-term range-bound movement.

🔸 Key Drivers

✅ Neutral-to-Supportive Factors:

  • Basis strength implies spot resilience and hedging pressure on the short side.
  • No new bearish policy developments domestically or globally.

❌ Bearish Momentum Lacking:

  • Price declines are not following through cleanly, indicating that downside momentum is losing traction.
  • Weak participation and reduced open interest further support the idea of consolidation.

📊 Short-Term View
The current market appears to be in a holding pattern, lacking strong drivers in either direction. Volatility is expected to remain low until new macro or demand-side catalysts emerge.

🔹 Strategy Suggestion:
Reduce Short Positions — Wait and See
Given that the downtrend has stalled and there is no strong conviction on either side, the advised approach is to scale back bearish positions and observe for clearer reentry opportunities.

⚠️ Watch Closely
Focus on any surprise announcements or shifts in physical demand trends. Until then, expect steel futures to remain locked in a narrow range.

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