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Can the steel market hold up?

The spot market in the steel market is dominated by weak operation, general transaction, low speculative demand and low market sentiment. In terms of fundamentals, three aspects are clear. First, the demand is difficult to improve, especially in the heating season in the north, the demand is obvious. Second, the output also decreased. The steel price is low and the company continues to lose money. The steel mills take the initiative to reduce production. At present, the average daily output of iron ore is declining, and the decline of finished products is not obvious enough, which needs time to digest. It is expected that the steel output will continue to show a small decline in the future. The third is that the overall inventory keeps a good pace of de stocking. Due to the low level of inventory, the factory warehouse has a certain space in front of it, and it can buffer the pressure of decreasing demand brought by downstream.

The decline of various data indicators can be concluded as follows: first, the number of new projects has decreased compared with previous years, followed by the reduction of steel consumption of downstream enterprises of construction steel; Secondly, due to the poor trend of construction steel market this year, pessimistic market sentiment, weak expectations and other reasons, terminal enterprises mainly purchase on demand, and the procurement pace slows down, so the overall market’s digestion of construction steel is significantly weakened. In terms of spot goods, driven by factors such as the slowdown of the global high-intensity interest rate increase, the domestic economic recovery, the improvement of the real estate margin, and the easing of the contradiction between supply and demand brought by the production reduction, the steel price is likely to rise.

Post time: Nov-14-2022