The pressure of the “off-season” has expanded, what is the trend of the steel market in July?

In addition to weakening seasonal demand, there is also some downward pressure on manufacturing demand.
At the same time, from the perspective of export orders, due to the weakness of overseas manufacturing, external demand tends to weaken. In June, the export order index of my country’s iron and steel enterprises is still running in the contraction range, which will form certain restrictions on my country’s steel exports in the later period. Moreover, due to the obvious weakening of my country’s steel export price advantage, the decline in overseas manufacturing and the gradual easing of the weak steel supply situation will form certain constraints on steel exports in the later period.
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In terms of production, due to the rebound in steel prices in June, the profits of steel mills have recovered significantly. But it is worth noting that there have been constant news of the recent deadline. Today, it was once again reported that Tangshan will limit production in July, saying that from July 1 to July 31, 11 A-level steel companies in the city will implement control measures in accordance with the agreed emission reductions. 50% of the sintering machines of B-level and below iron and steel enterprises have been shut down. Although the news has not been confirmed, the market’s expectations for production restrictions are increasing.
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At present, the social inventory of steel products has turned from falling to rising. In addition, the Fed’s interest rate hikes, which were paused in June, may resume in July. If the Fed raises interest rates again, it will be negative for international commodities.
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From the current point of view, the market is facing a situation of high supply, low demand, inventory recovery, and overseas risks still exist. The overall market pressure is increasing, and the steel market may be weak and volatile in July.
But it is worth noting that the financial attributes of steel are getting stronger and stronger. The factors affecting the spot price trend are no longer limited to the fundamentals of supply and demand, but are also greatly affected by futures. Today’s steel products are the product of the deep integration of capital and industry. The two rounds of increases in the first quarter and June of this year were due to the low season of steel consumption and the fundamental contradictions still exist. Futures started first, driving the spot market to rise.
Therefore, driven by strong expectations and capital speculation, it is not ruled out that steel prices may rise periodically in July, but the overall market is still weak.