Resumption of game demand, the steel market may drop again

At present, the macroeconomic policies are working together, the economy and society have fully resumed normal operation, the year-on-year growth rate of most production demand indicators has increased, the service industry and consumption have recovered rapidly, employment prices are generally stable, and the economic operation continues to recover. It should be noted that the international environment is complex and severe, external pressure is still relatively high, domestic demand constraints still exist, the endogenous driving force for economic recovery is not strong, some structural problems are still relatively prominent, and the promotion of high-quality economic development still faces many difficulties and difficulties. challenge. For the steel market, due to the high temperature in the north and the arrival of the rainy season in the south, the impact of weather on project construction will gradually increase, which will have a significant impact on the demand in the steel market.
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In the short term, the domestic steel market will show a pattern of “supply-side entanglement and resumption of production, demand-side constraints increasing, and cost-side support resilience”.
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From the perspective of the supply side, due to the narrow range fluctuation of steel prices and the rise of raw material prices, the profits of spot production will push steel enterprises to resume production operations, and the short-term supply side will show a situation of volatility and recovery. From the perspective of demand, due to the high temperature in the north and the arrival of the rainy season in the south, the impact of weather on project construction will gradually increase. The terminal demand is only purchased on demand, and the market transaction is not as expected.
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From the cost point of view, as steel mills transition from production reduction to production resumption, raw material prices have begun to stop falling and rise, which makes cost support have a certain degree of resilience in the short term. It is predicted that this week (2023.5.22-5.26) the domestic steel market will fluctuate within a narrow range, and some regions or varieties may rebound slightly during the downward trend.