Strong expectations superimpose strong costs, the domestic steel market fluctuates and rises

The market prices of major steel products fluctuated and rose. Compared with last week, the rising products increased significantly, the flat products decreased, and the declining products slightly decreased.
At present, the wave of global interest rate hikes shows signs of gradually peaking, and inflationary pressure still exists. Rapid global interest rate hikes have triggered weak global manufacturing demand, and the downside risks of the global economy have increased. For the domestic steel market, with the full implementation of a package of policies and follow-up measures to stabilize the economy this year, and the clarification of next year’s economic work, stable economic growth will once again be given priority, and at the same time the further optimization of epidemic prevention and control measures will be superimposed. The growth rate will continue to pick up, which gives the steel market strong confidence and expectations.
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From the perspective of the supply side, due to the obvious increase in raw material costs, the profit margins of steel mills have been compressed, thereby limiting the release of production capacity of steel mills, and the short-term supply side will show a dynamic adjustment trend.
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From the perspective of the demand side, the demand for rush work is gradually coming to an end, and the demand for winter storage is gradually opening up. However, due to price issues, the market generally lacks willingness for winter storage, which also limits the release of winter storage demand.
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From the perspective of cost, due to the recent significant rise in raw material prices, short-term cost support is strong, and steel mills are more willing to raise prices. In the short term, the domestic steel market will also face a game between strong expectations and weak reality. The short-term dynamic adjustment of supply, the off-season effect of demand appears, the release of winter storage demand is limited, and the cost support is significantly enhanced. It is predicted that this week (2022.12.12 -12.16) The domestic steel market will show a fluctuating upward trend led by strong expectations and supported by strong costs.