The domestic steel market fluctuates and rises as the peak season hits interest rate cuts

In the 33rd 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 within a narrow range. Compared with last week, the rising varieties have increased. The flat varieties remained stable, and the declining varieties decreased. The domestic iron and steel raw material market rose steadily, with the price of iron ore rising by 5-20 yuan, the price of coke remaining stable, and the price of steel billet rising by 10 yuan.
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At present, from the perspective of the external situation, the expectation of the Fed’s interest rate hike next month is full of suspense; from the perspective of the domestic situation, my country’s economy continues to recover, but domestic demand is still insufficient, and the foundation for economic recovery still needs to be strengthened. Another batch of stable growth policies have been introduced. For the steel market, driven by the promotion of stable growth policies and the reduction of the interest rate of the central bank’s policy tools, strong expectations are turning into strong reality.
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In the short term, the domestic steel market will present a pattern of “the external environment is full of suspense, counter-cyclical adjustments are intensified, asymmetrical interest rate cuts may be on the way, the traditional off-season turns to peak season, and terminal demand gradually improves”.
From the perspective of the supply side, due to the narrow fluctuations in the steel market and the relative resilience of raw material prices, the willingness to release the production capacity of steel mills in the short term continues to weaken, and the short-term supply side will show a slight.
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From the perspective of demand, the traditional off-season is gradually changing to the peak season, the market transaction is gradually improving, the social inventory of steel products is beginning to decline, and the demand for stocking is increasing.
From the perspective of cost, the price of iron ore fluctuated and rose, while the price of coke in steel mills began to increase and decrease, so that the cost support may show signs of weakening. It is predicted that next week (2023.8.21-8.25) the domestic steel market will be driven by the policy of stabilizing growth and the reduction of the interest rate of the central bank’s policy tools.