Analysis：

Focus one: to capacity

The second half of 2015, capacity to hot, especially in 2016 on a number of steel enterprises in the teeth of the storm, was stopped, and more frequent production to alleviate pollution and excess. But from the implementation point of view, in 2016 to contain more water, a number of steel enterprises, although reported a reduction plan, but from being eliminated, demolition of the blast furnace, the zombie enterprises accounted for the majority. The day before, the SASAC has been fully out of the central enterprises need special handling and management of the zombie companies and poor 2041 enterprises, involving 3 trillion yuan of assets. The capacity to 2017 not only difficulty is the key to upgrade capacity, from 13th Five-Year to 2017 upgrade plan, production capacity will be staged more "real thing", the accountability system will also be more clear.

Combined with the current steel Chinese operating environment, it is not difficult to find that the object for many times to rectify the "steel" and other substandard enterprises. Later the regional consolidation will be more obvious, focus on Shandong, Zhejiang, Shanxi, Henan, Hebei area. But now need to pay attention to is that the regulatory implementation of these companies often have a lot of difficulty, which means that the market will be frequent shocks in 2017.

Focus two: low inventory

The total inventory did not in the expected increase in steel prices sharply increase the possibility of visible November has not, especially near the end of the month, many Zaibao discontinued events, visible years ago will continue to maintain this tight supply pattern. This is to a large extent, to ease the market pressure. Moreover, small and medium sized steel enterprises to large steel enterprises problems currently being thorough investigation, the possibility of years ago inventory increased again to reduce the width of the spot market, it is undoubtedly good.

Focus three: high cost

Although the current steel prices rose wide, but by raw material prices continue to rise, steel prices are still facing losses ranging from 200-500 yuan / ton. So from the point of view of steel enterprises themselves, no active market. From this point, the introduction of the latest Sha River steel price policy can be seen, steel prices very price will be more strong. In addition, although the 2017 year old coal price has been limited, but was significantly higher than in 2016. While the market is concerned, this is also a signal release, the future will continue to operate at high cost.

Focus four: demand side

Ministry of Housing recently issued a document, the latter will vigorously develop the assembly building, which means that the demand for steel structure will once again upgrade. Development and Reform Commission approved the two railway project, the amount of investment of nearly 110 billion yuan. Among them, the new Beijing to Tangshan railway, with a total investment of 44 billion 900 million yuan; Ganzhou to Shenzhen railway, a total investment of 64 billion 130 million yuan. The national development and Reform Commission issued the "national rural economic development plan", "13th Five-Year" put forward 33 major projects and projects. Expected demand, coupled with the fundamentals of good support, 2017 steel prices have continued to rise in space. However, the recent frequent site restrictions on the construction of the situation, so the instability of the future demand will be more and more obvious.

Focus five: Futures Guidelines

Recent futures performance is relatively strong, the original intention to look at the 2600 line is low, but there is still a certain gap is still a certain gap has ushered in a rebound, which has a great relationship with the support of the news. From the operational point of view, the short-term bullish, but to calculate the positions, at present, the list is not empty out, single high air is still a large profit space, plus a new empty single join, making the future to homeopathic holdings with the power of the power with long admission continue to push up prices. Therefore, attention to changes in the amount of interest is the key. There positions plummeted or reverse surge, is crucial to judge whether the reversal of the trend.

Be vigilant：

Everything has two sides, when good come out completely, may also counterattack at the crucial moment. It should be noted that: 1, 2017 to capacity is serious, but also the stages of the season, so the law will be subject to greater influence to production factors, at the same time, as the steel price pull up steel prices will be more complex, this "rush into danger" will increase the instability of the market. 2, inventory is low, remove the capacity factors, on the other hand is a large enterprise sales channel conversion, increase the site direct supply and distribution, which will increase the risk of late transfer. 3, although the futures bullish 3500+, but more confidence in the price of stock is low, raw materials prices continue to rise and go to production factors, each link closely linked, once the deviation, the results will be received. 4, futures guide is strong, but also the key to be suppressed, nearly two months, the exchange frequent adjustment of each transaction threshold, cooling significantly. Late policy guidelines and pressure will become the key.

Overall, in 2017 will show the first strong weak pattern in the first half of the steel price will be directly see 3500-3700 yuan / ton, if the latter run properly, it is likely to rush to 4000 yuan / ton. But at this time also need to pay attention to, when all the views expressed, expected future market will become more whirling, especially once fundamental information changes, it will affect the dealer trader means, will also have a greater impact on the market. Although bullish, shorten the delivery cycle but keep shipping advice, 3-5 days in advance the pace for the best.