Raw materials will fall again? Is it useful to “fry” production cuts in the steel market again?

Today, the steel market mainly fell slightly, and individual markets remained stable or rose slightly. Some varieties such as medium plate, cold-rolled and galvanized are stable and have a decline. Affected by the downturn in the steel market, some markets have dropped by 10-20 yuan. The overall transaction is still average, but a few areas are better than yesterday, and the terminal purchases increase. In general, market confidence is insufficient, and feedback from many places is still weak demand leading to market downturn.
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Recently, the profits of steel mills have been hovering between meager profits and losses. Electric furnace steel mills in the southwest and other regions suffered large losses and stopped production. The contradictions in the market point to the output of blast furnaces. Today, it is also rumored that Tangshan Steel Works has received a report on the output in May and will issue a flat control policy. According to research, there are indeed reports of steel mills receiving output reports, but the smooth control policy was not mentioned. Regardless of smooth control or not, the later the time, the heavier the task of suppressing production. At present, the mine, coke and steel game has entered into a fever, and the market has also spread that the ninth round of coke lifting and lowering is brewing. On the one hand, it is the safety inspection of coal mines in the production area, and on the other hand, it is the downstream pressure. When the profit margin of coal and coke is extremely small, Iron ore is also under increasing pressure. After all, foreign iron ore mines still have several times the profits in hand.
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Overseas, there are endless debates around the US debt ceiling issue. If the debt ceiling is successfully resolved, it will be beneficial to the bulk market. However, the initial manufacturing PMI data of 44.6 just released in the euro zone is not optimistic, significantly lower than the previous value of 45.8, and also lower than market expectations. Even the manufacturing PMI in the United Kingdom recorded 46.9 in May, a five-month low. Signs of weakness in the manufacturing sector have become more pronounced, with a manufacturing powerhouse like Germany most notably slumped in new orders, especially from abroad, leading to a sharp drop in the country’s backlog of orders. This is ultimately weak demand.
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From the current point of view, steel continues to be in a weak state, lacking a strong upward drive. However, some markets have also taken more active actions to protect the market and raise prices, which has changed from the previous behavior of continuously reducing prices and selling goods. From a fundamental point of view, it is an indisputable fact that demand is poor. In the short term, supply is still needed to adjust the relationship between supply and demand, and the raw material side has not yet stabilized. Overseas, the downstream manufacturing industry continues to decline, and demand is sluggish, which is negative for industrial products. In the short term, the market still has expectations for production cuts and macro policies. If the market sentiment improves and funds are reduced, the price-hunting behavior on futures will also bring certain benefits, and there will be local signs of stabilization and even a slight rebound. However, the downward trend of the big cycle has not changed, and there are no strong conditions for the market to reverse.