** Quotes end real estate regulation and then inhibit steel prices Since the buzz, most commodity markets have exhibited a volatile pattern. At the beginning of the meeting, the central government stifled commodity prices in order to reduce the growth rate of domestic economy, and then, in the context of loose credit, most of the commodities recovered lost ground. The main contract of rebar fell first and then rose. During the ** period, the increase was about 0.7%. The weather improved and the transactions became more active. The traders and steel mills were optimistic. The steel continued to pull out the Yang Xian during the period of **. With regard to the determination of real estate regulation, real estate stocks have fallen and dragged down commodity prices, especially industrial products.

On the 14th, Premier Wen Jiabao answered reporters' questions and mentioned several opinions on real estate control. He said that if the real estate market appears to be in a bubble, it will drag down the entire economy once it is destroyed; it is mentioned that "in some places housing prices are still far from reasonable prices." It can be described as very strict and resolute. However, the author believes that the pessimistic expectation of industrial products brought about by real estate regulation and control should have been fully reflected in the decline in November last year. The heavy volume of rebars on the 14th is more indicative of technical adjustments.

There is indeed no small risk point in the real estate market. From January-February real estate investment data, real estate development and investment grew at a rate of 27.8%, showing steady performance; the area of ​​housing construction grew at a rate of 35.5%, rebounding to last year's high, and short-term real estate appears to enter the construction period, which is short-term from the construction steel The warming of demand has been reflected. Worryingly, the year-on-year growth rate of new real estate starts fell to 5.1%; the national housing prosperity index also continued to decline to 97.89 points, which is the lowest value since August 2009; land purchase area growth rate fell to -0.5% This is also the lowest value since 2010; the sustainability of the recovery in demand for construction steel products is cause for concern. This is also one of the reasons why we believe that the rebar prices this year will not rise above the mid-year consolidation range.

On the other hand, real estate regulation should see its two sides. The repression of real estate demand caused by the purchase restriction policy is only one aspect of regulation and control. It needs to be complemented by the increase in supply. Supply and demand are balanced in the market rather than the balance under policy control. On the premise of the return, the construction of affordable housing is one of the important measures to balance the supply and demand in the market and stabilize the return of housing prices. Under the background of deceleration of commercial housing construction, affordable housing construction will only accelerate this year will not slow down, the task will only be more implementation will not surface. This is one of the main reasons why we believe that the rebar ** main contract of 4,000 yuan is the iron bottom of this year.

In addition to real estate regulation, the focus of the demand side should also focus on the current state of construction of large-scale infrastructure projects. In February, the year-on-year growth rate of the cumulative completion of railway fixed asset investment was -44.38%, and the accumulative total investment in highway fixed assets was -12.17% year-on-year, both of which had fallen to record lows. According to our previous estimates, the growth rate of railway fixed asset investment in 2012 may maintain its decline level last year, which is about -20%. At present, this situation is obviously "too cold". From the actual situation, we can see that the implementation of the project funds of the Ministry of Railways has not been eased, and the continuation of the semi-cessation of many projects is the main reason for the sharp decline in investment growth in the first half of this year. This situation should be lack of continuity. As bank credits are released, the construction of railways and highways in April will have an improvement.

From a technical point of view, the thread ** is currently in the vicinity of the stage high point, long and short capital funds behave cautiously, the main shorts began to significantly lighten up, may lead to short positions to break up the market. As a whole, the trend of consolidation has maintained a good momentum and the momentum is slightly insufficient. If the main contract of the main thread stands firm at 4,350 yuan, there will be further upside. (The author is an analyst of Guotai Junan **)

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