Supply drops, demand is limited, and the steel market is difficult to change the weak shock

In the 43rd week of 2022, the price changes of 17 categories and 43 specifications (varieties) of steel raw materials and steel products in some parts of China are as follows: The market prices of major steel products fluctuated and adjusted. Compared with last week, the rising varieties remained stable. The flat varieties remained stable, and the falling varieties remained stable. Among them, 5 varieties rose, the same as last week; 8 varieties remained the same as last week; 30 varieties fell, 29 more than last week. The domestic steel raw material market fell steadily, the price of iron ore fell steadily, the price of coke remained stable, the price of scrap steel fell steadily by 130 yuan, and the price of billet fell by 40 yuan.
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At present, due to the continued high inflation pressure in various countries, the expectation that the central bank will increase the pace of interest rate hikes has increased, and the central bank of China will continue to implement a sound monetary policy and strengthen cross-cyclical and counter-cyclical adjustment, in order to promote economic growth, expand employment, stabilize prices, Maintaining the balance of international payments and creating a sound monetary and financial environment, it is also necessary to guide financial resources to better support the key areas and weak links of economic and social development. For the domestic steel market, the expectation of warmer demand still exists, but the actual release of terminal demand is still less than market expectations.
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From the perspective of the supply side, as the profits of steel mills have been eroded again and faced the pressure of loss, some steel mills have begun to increase the intensity of maintenance and production reduction, and the short-term supply side will continue to decline. From the demand side, the expectation of warmer demand is playing against the reality of sluggish transactions. The construction progress is accelerated, the construction progress is limited, the steel stock is declining, and the inventory of steel mills is rebounding. With the arrival of late autumn, the time for effective construction is gradually increasing. Reduced, demand constraints will gradually increase. From the perspective of cost, as steel mills began to increase maintenance and production reduction efforts, the relatively strong raw material prices also began to loosen, which made the short-term cost support begin to weaken.
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In the short term, the domestic steel market will face a continuous decline in short-term supply, expected recovery in terminal demand, limited project construction progress, and weakening cost support. It is expected that this week (2022.10.24-10.28) the domestic steel market will remain weak and fluctuated. However, it does not rule out that some varieties will rebound driven by the release of demand.