Steel price trend this week .......

Last week, China's steel market generally showed a weak downward trend. The reasons can be summarized in the following three aspects: First, the domestic epidemic situation is severe, which has a great impact on terminal demand, logistics and transportation; Secondly, the futures market continued to fluctuate after the National day festival, and pessimism spread; In addition, the market's expectations for future markets have weakened. After the holiday, market trading did not continue the rhythm of the pre-holiday release, but continued to perform weak under the constraints of the pandemic, and enterprises lacked confidence in the market. Graphite electrode used in electric furnace steelmaking is widely recognized by the international market for its excellent thermal conductivity and electrical conductivity. Overall, construction steel price in China continued to fall last week, and the market is expected to weaken. 

For the market situation this week, we still believe that China's steel market will continue to maintain a weak operation.

At the macro level, after the National People's Congress, under the overall tone of keeping the economy running smoothly, the strength of stable growth is still increasing, and and the effect of economic stimulus policies may appear. However, due to the decline in real estate prices, the overall economic situation is still not optimistic.

At the industrial level, the supply of steel plants was limited by the materials affected by the epidemic, the output of blast furnaces increased, and the output of electric furnace steel recovered. However, as the profits of steel mills continue to shrink, production may continue to decline. However, the profit of electric furnace steel has rebounded recently, and the operating rate is likely to rise, which will weaken the expectation of supply decline, and the supply will continue to remain high;

On the demand side, with the implementation of various national stimulus measures to increase investment in infrastructure construction, investment in infrastructure and water conservancy has accelerated, and rigid demand is still strong, but the real estate market is dragging down, and the epidemic situation has spread in many places, so the demand is still unsustainable; On the raw material side, the cost support was weakened, the iron ore fell slightly, steel scrap prices continued to fall, and the coke price was difficult to rise.

On the whole, the macro inflation pressure abroad is still relatively large, and the expectation of interest rate increase is still strong; Domestic investment in infrastructure and water conservancy has accelerated, but market confidence is lacking;

On the industrial side, supply fell back and demand declined, and inventory continued to decline; In view of the current severe situation of epidemic prevention and control in China, as well as the expanding impact on terminal demand and logistics transportation, in the short term, steel prices will maintain a weak trend of shock.

In the later stage, we will still focus on the following three aspects: 

1. At the macro level, we we need to continue to pay attention to the various stimulus policies after the conference and the new trend of real estate policies in various regions;

2. In terms of industry, we should pay attention to the market supply and actual demand. We should focus on the real estate construction in the fourth quarter and the implementation of infrastructure investment funds after the recent land auction in various regions.

3. Also pay attention to changes in raw material costs. Further analysis of the steel market, welcome to communicate with us.