Forecast: Strong expectations lead the reappearance, and the steel market will have a “good start” after the festival

The data shows that in the third 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 varieties fluctuate at high levels. Compared with last week, the rising varieties have decreased significantly , the varieties that remained flat increased substantially, and the varieties that declined slightly increased. Among them, 9 varieties rose, 22 less than last week; 28 varieties were flat, 19 more than last week; 6 varieties fell, 3 more than last week. The domestic iron and steel raw material market declined steadily, the price of iron ore fell by 20 yuan, the price of coke remained stable, the price of scrap steel remained stable, and the price of steel billet fell slightly.
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In 2023, despite the complex and severe external environment, the rising risk of stagflation in the world economy, and the weak foundation for domestic economic recovery, my country’s economy has strong resilience, great potential, sufficient vitality, and long-term positive fundamentals have not changed, and resource factors can be supported. With the continuous implementation of various policies, the order of production and life is expected to be restored at an accelerated pace, and the endogenous driving force for economic growth will continue to accumulate and strengthen. For the domestic steel market, the continuous implementation of various macro policies has played a significant positive role in boosting the confidence and expectations of the steel market.
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In the short term, the domestic steel market is already in the traditional “winter storage” market, and steel mill inventories, social inventories and steel prices have all risen simultaneously. From the perspective of the supply side, due to the pressure on raw material prices, the loss margin of steel enterprises has narrowed, and the production enthusiasm of steel mills has increased, and the supply side will show a trend of recovery under pressure.

From the demand side, the pre-holiday winter storage operation has come to an end, and the price of winter storage is generally high, which restricts the winter storage demand of traders, and most steel mills have mainly self-storage.
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From the perspective of cost, the “handling” of iron ore prices at the regulatory level has put raw material prices under significant pressure, and short-term cost support has weakened. It is predicted that after the festival (2023.1.30-2.3), the domestic steel market will show a “good start” pull-up market.