Don’t be too pessimistic! The steel market is still on the road to improvement

Today, the steel market mainly rose slightly. The rise of spiral coils is more common, and cold-rolled, medium plate, strip steel, profiles, and some pipes all have an increase of 10-30 yuan. The overall price level has rebounded from the previous day, and the market has taken a step forward after stopping the decline. Due to the better rebound sentiment in the disk, the spot sentiment has improved.
The current operating state of the market is shocks superimposed with tentative rebounds, and has not yet returned to the upward trending track. The market generally expects that it will be difficult to have a big market in February, and the shock will take a long time. The start of demand is expected to be after the two sessions in March.
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On the macro front, there are currently not many logical drivers to continue to strengthen expectations. Because the economic data in January has not yet been seen, most of the implemented policies are the continuation of the previous ones. For example, in February, many provinces and cities issued intensive policies to speed up the overall recovery of the exhibition economy.
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The general environment is stabilizing, and the steel market itself will not have too many variables except for industrial conflicts. This is also the reason why it is difficult for steel prices to continue to fall in the first stage of the callback. At present, the most urgent need for steel companies is to restore profits. Among the steel companies that announced and will soon publish last year’s annual report, the profit level of most companies has dropped sharply. Even Baosteel, a leading company with obvious competitive advantages in high-end plates, has dropped by as much as More than 40%, it can be seen that industry adjustments have a profound impact on enterprises. Reflected on steel prices, we still face the indisputable fact that mines are strong and steel is weak.
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From the current point of view, affected by the continued rebound of futures, the sentiment of the spot market and the overall shipment status have improved. However, there are also situations where it is difficult to ship goods after price increases in some areas, indicating that demand recovery is still slow. The Spring Festival in the Year of the Rabbit is early, but the beginning of spring is not early after the new year, resulting in a large psychological gap between the market’s high demand expectations and relatively low reality. Therefore, in operation, prudent thinking is universal. However, from multiple perspectives such as cost, macro, capital, etc., it is difficult to continue to fall in a short period of time, follow the trend and rebound slightly, and the probability of continued shock is high. There is no need for the market to be too pessimistic.