Experts say city - March 24

My Steel:On the supply side, the supply of major steel varieties last Friday was 8.6542 million tons, a week-on-week increase of 122,100 tons, or 1.4%. Suppressed by weak demand expectations, steel mills' profits have narrowed, leading to a marginal weakening of their production growth momentum, thus narrowing the output growth compared to last week; last Friday's total inventory of major steel varieties was 17.8809 million tons, a week-on-week decrease of 415,300 tons, or 2.3%. The week-on-week decrease in total inventory of the five major varieties expanded, mainly due to improved weather and the driving force of low-price transactions, further releasing demand momentum; on the consumption side, the weekly apparent consumption of the five major varieties last week was 9.0695 million tons, a week-on-week increase of 2.6%: construction material consumption increased by 5.5%, and plate material consumption increased by 1.0%. Last week, the growth rate of construction material consumption among the five major steel varieties was better than that of plate material, mainly because the demand for long materials increased significantly after the weather improved, while the demand for plate material has approached the same period last year, and further incremental space is limited. Overall, the steel market last week showed a situation of both supply and demand increasing, and the extent of inventory reduction further strengthened, reflecting that demand is still recovering, especially the rebound of construction material demand is more obvious. On the supply side, the current steel profits still exist, so the short-term production enthusiasm of steel mills is likely to be maintained, so steel output is expected to continue to rise; on the demand side, as the weather continues to warm up, the demand for long materials is expected to be further released; while the demand for plate materials is suppressed by exports, the incremental space is not obvious. In terms of inventory, the current steel inventory is in the early stage of the destocking cycle, and in the future, as the peak season characteristics further become apparent, steel inventory is expected to maintain destocking. It is expected that in the short term, steel prices will be driven by the marginal improvement of the supply and demand fundamentals and the bottom-picking behavior under low valuations, and the price trend may show a rebound pattern in the short term.

Steel Home:Last week, the domestic steel market trend was weak, with rebar and hot-rolled coils generally falling, mainly due to the significant impact of the black futures market. From the recent market perspective, the output of steel in China in January and February was generally high, with a steel output of 224 million tons, a year-on-year increase of 4.7%, and the recent blast furnace and electric furnace operating rates have continued to rise, and the output in March will continue to rise; the United States officially imposed a 25% tariff on steel, and China is facing an increase in trade frictions, making the steel export environment severe and increasing domestic supply pressure, making businesses more cautious about the future. On the positive side, downstream demand has generally rebounded, and total steel inventory is lower than in previous years; raw material prices have basically stopped falling, and there is limited room for further short-term decline in steel costs. It is expected that the domestic steel market price this week will mainly fluctuate slightly.

Lange:Since the beginning of 2025, with the continued effectiveness of various macroeconomic policies, the national economy has continued to move towards a new and positive trend, and the quality of development has steadily improved. However, it should also be noted that the external environment is becoming more complex and severe, domestic effective demand is insufficient, some enterprises are facing difficulties in production and operation, and the foundation for sustained economic recovery and improvement is not yet solid. We must fully implement the spirit of the Central Economic Work Conference and the national “Two Sessions”, adhere to the general tone of seeking progress while maintaining stability, fully, accurately, and comprehensively implement the new development philosophy, accelerate the construction of a new development pattern, solidly promote high-quality development, implement more proactive and effective macroeconomic policies, comprehensively expand domestic demand, further deepen reform and opening up, focus on enhancing momentum, stimulating vitality, and improving expectations, and promote sustained economic recovery and improvement.From the perspective of black futures, the main contract of rebar 05 closed at 3156, down 1 point for the day, down 111 points from the closing price of 3267 on Friday, and the weekly settlement price was 3185, down 96 points; the latest holdings were 2.077 million lots, an increase of 114,000 lots from Friday. At present, the weekly line has broken down, breaking through the low point of last week and the low point of January, setting a new low for the year. Next, we will continue to focus on the pressure level of 3200-3230. If we cannot effectively return to this range, there is still a risk of further decline. From the steel spot market perspective, on the supply side: due to the impact of profit and loss on different varieties, the intensity of capacity release has shifted from weak to strong, pig iron production has increased, and the output of various varieties has increased significantly. On the demand side: although the domestic market is currently in the traditional peak demand season, steel mills and social inventories continue to decline, but the transactions of various varieties remain unstable, indicating that the release of terminal demand is insufficient. On the cost side: due to the slight decline in iron ore prices, the slight decline in scrap steel prices, and the slight decline in coke prices, the support of production costs continues to weaken. Therefore, the Lange Steel Research Center predicts that under the influence of the expectations of proactive and effective policies, the shift from weak to strong release of supply, lukewarm market transactions, and weakened cost support, the domestic steel market this week (March 24-28, 2025) will continue to fluctuate and weaken.

Tang Song:This week, construction projects in both southern and northern China have entered the full construction phase, and the demand for rebar nationwide has entered the peak demand period; processing and manufacturing enterprises are in normal production, and there is still room for growth in the demand for strip steel; the rigid demand for steel will continue to increase, and the traditional peak demand season characteristics of “golden March and silver April” will be shown. From the supply side, the operating rate of long-process blast furnaces is stable at a high level, and the incremental space for the output of main products such as coils and strips is narrowing; currently, independent electric arc furnace production lines in the south are in a state of profit and loss, and the operating rate of production lines may be basically stable, with a slight increase or decrease in rebar production. The peak turning point of steel inventory has been basically determined, and social inventory has entered a slow downward channel, with the inventory of major varieties decreasing slightly, and the actual supply-demand relationship continues to improve.

 Given that the recent steel futures and spot prices have fallen to low levels, coupled with the fact that rigid demand has entered the peak season, trade transactions may improve, and inventory continues to decline, the decline in the steel futures and spot markets may slow down. However, due to continuous unfavorable news from abroad and the lack of unexpectedly good policies domestically; in particular, under the conditions of weak raw material prices, acceptable steel mill profits, expected pressure for increased supply, and weakened cost support for steel prices, market operations are cautious. In the short term, if demand still does not pick up or production restrictions/control cannot be fulfilled, the overall black market may continue to decline due to concerns about high profits and high output. For the futures price of rebar, support levels around 3100 and 3060 should be watched from below, while resistance above 3235 should be considered, the overall market is weak.

Han Weidong, Youfa Group:I attended the Zhonggang.com conference over the weekend, which was very successful. The chief analyst of Zhonggang.com expressed an optimistic outlook for the market in the second quarter, and Song Lei, chairman of Tang Song Steel Network, who also attended the conference, is also optimistic about the second quarter. Wu Wenchang from Steel Home believes that there is a good opportunity to enter the market in March and in April-May. My presentation at the conference had two main points: 1. The worst time for China's steel industry ended last October! In the first ten months of last year, China's demand decreased by 50 million tons, while from November to now, demand has increased year-on-year for five consecutive months. 2. The best time for the steel industry has not yet arrived, and it is still in a period of overcapacity, but it is better than last year. If there is supply-side reform 2.0, the steel industry will have opportunities. For the second quarter, as long as demand does not become particularly bad and peak season demand appears, the market is expected to rebound from the bottom, but it will be difficult to break through the high point of the fluctuation. If production restrictions occur, there will be more opportunities. Regarding demand for this year, President Wang of the China Iron and Steel Association predicts a decrease of 1% or flat. The decrease in the demand for construction steel has changed from a decrease of 54 million tons last year to a decrease of 9 million tons, which will not cause serious drag. In short, there is no need to be too pessimistic now.