Weak demand leads to rising costs, and the shock of the steel market weakens in the off-season

The prices of major steel products fluctuated and fell. Compared with last week, the rising products decreased slightly, the flat products remained stable, and the falling products increased slightly. The domestic iron and steel raw material market was stable with some declines. The price of iron ore fell by 15-30 yuan, the price of coke remained stable, the price of scrap steel fell by 30-70 yuan, and the price of steel billet fell by 60 yuan.
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Judging from the current external situation, the cooling of U.S. inflation may provide sufficient reasons for it to suspend interest rate hikes next month, which has also eased the pressure on the international commodity market; Open, other policies to expand domestic demand are also gradually implemented, but the implementation of the policy requires a process, and the effect remains to be seen. For the steel market, the impact of the traditional off-season is still relatively obvious, and the impact of “double typhoon” rainfall is also relatively extensive, thus restricting the release of terminal demand.
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In the short term, the domestic steel market will present a pattern of “the external environment tends to ease, the policy is being implemented, and it will take time for the effect to appear, and the impact of the two typhoons will be significant”, and the terminal demand will be obviously restricted.” From the perspective of the supply side, Due to the turbulent decline in the steel market and the resilience of raw material prices, the willingness of steel mills to release production capacity will continue to weaken in the short term, and the supply side will decline slightly in the short term.
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From the demand side, due to the successive invasion of “two typhoons” and the expansion of the scope of influence, the impact of rainy weather is more obvious, and the construction progress of the project is obviously restricted. From the cost point of view, the price of iron ore fluctuated and fell, the price of scrap steel fell slightly, and the price of coke rose for the fifth round, which made the cost support show strong resilience. It is expected that this week (2023.8.7-8.11) the domestic steel market will fluctuate and weaken in the game of cost resilience and weak demand.