•Price Action: The market surged and then retreated yesterday, with increased trading volume and reduced positions, resulting in a long upper shadow line indicating significant resistance at higher levels. For instance, in the case of rebar, the 3457 level is anticipated to remain unbroken in the coming days, suggesting a shift towards a consolidating trend. The likelihood of filling the gap left open on the lower side in the next few days is high.

• Basis Analysis: The basis is weakening, suggesting that the potential for upward price movement is limited.

• Fundamental Outlook: As the weather cools down and more regions experience temperatures below freezing, demand is expected to be adversely affected. Northern demand has shown signs of weakening, while East China’s demand remains relatively robust. Hangzhou’s inventory outflow is maintained at approximately 40,000 tons, indicating that there is still a steady base level of demand.

• Iron Ore Perspective: The January iron ore contract has demonstrated a notable weakening, and steel mills are nearing the end of their winter iron ore stockpiling. Today marks the completion of the shift from the January to the May contract, with the May contract set to become the leading one. It is anticipated that the January contract’s 833 level will not be easily surpassed in the short term.

• Market Expectations: The short-term market is projected to oscillate within a range of 3330 to 3430. The market’s direction post the Central Economic Work Conference is awaited, with a higher likelihood of a downward trend (potentially dropping by 200-300 points).

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