Forecast: Insufficient demand release, steel market shock adjustment

The market prices of major steel varieties fluctuated and fell. Compared with last week, the rising varieties were greatly reduced, the flat varieties were slightly reduced, and the declining varieties were significantly increased. Among them, 7 varieties rose, 19 less than last week; 7 varieties remained unchanged, 3 less than last week; 29 varieties fell, 22 more than last week. The domestic steel raw material market fluctuated and rose, the price of iron ore fell by 5-55 yuan, the price of coke rose by 200 yuan, the price of scrap steel fluctuated and consolidated, and the price of billet fell by 110 yuan.
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For the domestic steel market, whether the upcoming “Golden Nine” traditional construction peak season can promote the strong release of terminal demand has become the focus of the current steel market.
From the perspective of the supply side, due to the weak uptrend of steel prices, the profit margin of finished products has also been compressed, which makes the enthusiasm of steel mills to resume production weakened again. Influenced by the short-term supply-side production resumption progress will be affected.
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From the demand side, due to the blockage of the uptrend of steel prices, there is no sign of significant increase in terminal demand, and the confidence of market merchants is also insufficient. The wait-and-see atmosphere is strong, and the enthusiasm for stockpiling is obviously insufficient.
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From the perspective of cost, due to the lack of motivation for the upward movement of steel prices, the enthusiasm of steel mills to resume production has weakened. At the same time, the impact of regional power cuts on electric furnace plants is also obvious, which makes the price fluctuations of iron ore and scrap steel weaken. The price of coke has risen significantly. On the whole, the support on the cost side has weakened. In the short term, the domestic steel market will face the limited process of resumption of production by steel mills, the demand for stockpiling is obviously insufficient, the terminal demand has not seen heavy volume, and the cost support has weakened. It is expected that next week (2022.8.22-2022.8.26) domestic steel The market will once again fall into a volatile adjustment.