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Starting from a historical low valuation, can stainless steel rebound in April?

The main 2405 contract of stainless steel traded narrowly yesterday, with the market waiting for news from downstream. The trading volume yesterday was 185,713 lots, a significant decrease compared to the bottom rebound data on Monday. Some investors have started to try to lay out medium and long-term long positions at low levels. The Shanghai nickel price is also continuously falling, as expectations of alleviating the structural shortage of domestic new energy nickel continue to decline. The main stainless steel is currently in a oscillating adjustment, and it is expected to have limited rebound during the day, with the medium-term expected to start a rebound trend, with short positions dominating long positions.

On the 2nd, 304 cold-rolled flat plates in Wuxi were reported at 13,800-15,500 yuan/ton, an increase of 20 yuan/ton compared to the previous working day; 304 hot-rolled flat plates in Wuxi were reported at 13,200-15,200 yuan/ton, unchanged from the previous working day. On the news front, Cleveland Fed President Mester said on Tuesday that if the data supports it, the June policy meeting may be the time to start easing policy. “If the economy develops as expected, inflation continues to fall towards 2%, the labor market and economic growth remain robust, then I think it is appropriate to start lowering the federal funds rate later this year.” On the demand side, on March 29th, the China Iron and Steel Industry Association organized a rebar market seminar. Luo Tiejun, vice chairman of the Iron and Steel Association, emphasized that the consensus is that the demand trend for construction steel is declining, and this year’s start of demand in the construction market is significantly lagging behind. With the implementation of national policies in place, it is expected to see a bottoming out and rebound in demand, and everyone should closely monitor market changes. According to the principle of “three determinations and three don’ts,” adjust the production pace according to market demand and do not significantly increase production when market demand improves. The downstream market is expected to usher in a period of demand rebound, waiting for the rebound opportunity.

In terms of futures, the stainless steel 2405 contract broke through the strong support of the previous 13200 level on Monday, hitting a new low in recent months, and after a volume decline, it quickly pulled up strongly. Currently, the stainless steel price is approaching the cost, although the market is weak, the subsequent deep decline space is limited, coupled with the expectation of downstream steel mills rebounding in April, downstream markets have started to quote transactions. Consider laying out short and long positions for arbitrage. In the short term, the 13500 mark is still dominated by rebounding short positions. After breaking through the support level, treat it as a shake and layout the long positions of the 2409 contract in the distant months, with a try range near the previous low of 13280-300.

In terms of spot, pay attention to the replenishment support brought by the control of downstream shipments by companies led by Qingshan, and also pay attention to the rebound of downstream steel mill demand in mid-April. It is expected to usher in a phase of price rebound at the end of the golden three and the silver four.

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