The “good start” market fell through, and it is difficult for the steel market to make major changes before the holiday

From the current point of view, the cooling of market sentiment may have something to do with the first round of overall increase and decrease of coke in the near future. Since late November, the price of coke has started to rise in an all-round way. In less than a month, four rounds of increases have been fully implemented, with an increase of more than 400 yuan/ton. During the New Year’s Day, coke prices turned from rising to falling, with a drop of 100 yuan/ton. Today, coke and coking coal futures prices plunged again, and iron ore futures and spot prices also fell slightly. The loosening and downward movement of raw and fuel prices had a more obvious impact on market sentiment.
The full implementation of this round of coke price increase and decrease is mainly related to the losses of steel mills. At present, the demand for replenishment of steel mills is not large, and the enthusiasm for procurement has declined. The mainstream of the market is weak, and coking coal may continue to decline in the later period.
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On the demand side, with the approach of the Spring Festival, more and more companies are taking holidays early, resulting in a significant decline in demand. As the annual transactions gradually come to an end, there will be no major changes on the demand side, and market attention will focus on expectations for next year.
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On the supply side, it is still at a relatively low level. In the second half of 2022, although there is no strict production restriction policy in the market, the production enthusiasm of steel mills is generally not high due to losses. Although the reduction in production is not as good as last year, the overall production remains relatively stable without a significant increase.
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With the approach of the Spring Festival, the market will gradually enter a state of price but no market. The trend of steel prices in the later period is mainly affected by the sentiment of funds and has little to do with the fundamentals. In the short term, there is no strong driving force in the market at present, and the steel market will fluctuate slightly before the holiday.