News summary
Steel prices fluctuated strongly last week, boosted by overseas interest rate cuts and domestic policy expectations. This week's rally continued, with demand resilience and de-warehouse support. Raw material costs have risen and the basis has weakened. Risk warning: Production rebounded more than expected and the market weakened.
Newsletter text
[Steel market outlook: Inventory pressure eased, policy expectations strengthened price support] Last week's steel marketspincoingratisThe inventory pressure of the company has shown a downward trend, and the speed of destocking has also increased accordingly. At the same time, the rising expectations of overseas interest rate cuts and the positive outlook of domestic policies have jointly promoted steel prices to maintain a volatile and strong development trend. Although the market is facing the dual pressure of seasonal decline in demand and production growth, the support of the electricity cost of East China electric furnace steel still exists. In addition, the fluctuation of spiral difference remains stable at around 150 points. This week, the steel market continued its upward trend. Overseas re-inflation and domestic real estate policy transactions continued to lead market sentiment, while the strong performance of fundamentals provided solid support for steel prices. Observed from fundamental data, the speed of thread removal remains good, and hot coil inventory also shows a downward trend. Overall, the market fundamentals appear relatively healthy. The strong performance of raw material prices, especially iron ore and coking coal, continues to drive up costs, which is in sharp contrast to the relative strength of market prices, and the basis continues to narrow. Strong market expectations are also driving prices. Although commodity markets are generally rising and expectations of a U.S. interest rate cut may bring volatility, the overall bullish sentiment of the market is solid and the market is expected to continue to maintain a volatile and strong trend. On the supply side, the growth rate remains within a controllable range, while the demand side shows certain resilience. In terms of inventory, the trend of destocking is expected to continue. However, the market still needs to be alert to possible risk points, such as a rebound in output exceeding expectations or a weakening in disk prices, all of which may have an impact on the steel market.