Strong supply and weak demand superimpose policy disturbances, and the steel market is gradually under pressure in the off-season shocks

In the 27th week of 2023, the price changes of steel raw materials and steel products in some regions in China, including 17 categories and 43 specifications (variety), are as follows: The market prices of major steel products fluctuate within a narrow range. The varieties have increased, and the varieties that have fallen have increased. The domestic iron and steel raw material market fluctuated and consolidated, the price of iron ore fluctuated slightly, the price of coke rose steadily by 50 yuan, the price of scrap steel rose by 10-20 yuan, and the price of steel billet rose by 30 yuan.
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The current political and economic situation in the world is complicated, which has brought many impacts on my country’s development. However, under the complex and severe external environment, my country’s economy is still showing a positive trend of recovery. It achieved a good start in the first quarter and continued to recover in the second quarter.
At present, my country is in a critical period of economic recovery and industrial upgrading, with structural problems and cyclical contradictions intertwined and superimposed. To achieve sustained and overall improvement in economic operation and promote new breakthroughs in high-quality development, we must focus on the “combined punch” of policies, focus on stabilizing growth, stabilizing employment, and preventing risks, etc., and promptly introduce and implement a series of targeted, combined, Strongly coordinated policy measures will further boost confidence and stabilize expectations. For the steel market, the continuous introduction of policies to stabilize growth has played a positive role in stabilizing market confidence, but the ups and downs of terminal demand in the traditional off-season also restrict the steel market.
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In the short term, the domestic steel market will present a pattern of “continuing economic recovery, policy measures are still expected, market confidence is actively boosted, and the off-season effect is gradually emerging”. From the perspective of the supply side, due to the promotion of the profit-seeking effect, steel mills have a strong willingness to release production capacity, and the short-term supply side will show a strong release momentum.
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From the perspective of demand, the high temperature in the north and the rain in the south will turn into a wide range of high temperature weather, which will significantly restrict the construction progress of outdoor projects. The continuous recovery of steel warehouses has already reflected the power of the traditional off-season.
From the perspective of cost, the small fluctuations of iron ore, the steady rise of scrap steel prices and the partial implementation of the increase in coke prices all make the cost support maintain strong resilience. It is predicted that next week (2023.7.10-7.14) the domestic steel market will be under pressure and fluctuate, and some regions and varieties may gradually decline under the combined effect of increased supply and poor transactions.