The future goods price of deformed steel bar in China jumped up so quickly recently, even though the macroeconomic policy is bull, but most of the analyst said its not the right situation, this kind of anti-trend skyrocket booming, it may be just dad cat bounce, which means after a long term bear market, it may rise up for a short term, and then drop sharply soon.
Recently the iron ore price rose up at least 60 since Dec 2015, according to metal bulletin Led Data. With the help of this round of iron ore bull market,
Its also said lots of idle money from the stock market, rush into the future goods market because the bear stock market, which makes the steel bar future goods price going up some rapidly.
Except for steel rebar price, other goods prices like iron ore, steel plate, and pitch, they are all raised about 5 %, and its crazily keep going up.
There are two famous sayings
The first saying is the volume of steel rebar transaction is more than the whole volume of stock markets of Shanghai and Shenzhen
The second saying is steel rebar transaction volume is more than the year yield of China
And this is confirmed by the analyst.
Most people believe this is a crazy gamble, and it will drop quickly and lots of greedy investors are going to bankruptcy during this “dead cat bounce”.