Experts say the city - June 16

My Steel: On the supply side, the supply of major steel varieties last Friday was 8.5885 million tons, a week-on-week decrease of 215,300 tons, or 2.4%. Steel production decreased this period, with a more significant decrease in the output of construction materials; the total inventory of major steel varieties last Friday was 13.5456 million tons, a week-on-week decrease of 92,500 tons, or 0.7%. The total inventory of major varieties last Friday decreased, but the inventory changes of construction materials and plates diverged, with construction materials continuing to destock and plates continuing to accumulate; on the consumption side, the weekly consumption of major varieties last Friday was 8.681 million tons, with construction materials consumption down 3.5% week-on-week and plate consumption down 0.5% week-on-week. The consumption changes of construction materials and plates among the major varieties last Friday maintained a consistent structure. On the supply side, as the off-season deepens, demand may further weaken seasonally, and steel mill profits are also beginning to shrink gradually, with further production decline expected; on the inventory side, the inflection point of rebar accumulation may appear this week, and hot-rolled coils are also expected to start an accumulation cycle, with significant inventory pressure; on the demand side, the apparent consumption of rebar and hot-rolled coils has fallen seasonally. As the peak demand for steel is likely to have already appeared, overall inventory pressure will gradually increase. We should pay attention to the speed of steel accumulation and the weakening degree of cost support.

Steel Home: The current domestic steel market fundamentals remain weak. On the supply side, the blast furnace and electric arc furnace operating rates surveyed by Steel Home have both rebounded, steel production is basically normal, and production cuts are not significant; on the demand side, the current period is the off-season for downstream consumption, and the off-season characteristics are more obvious. The supply and demand of construction steel have both decreased, while industrial steel is affected by the weakening of the trade-in effect and export obstacles, and the supply-demand contradiction may gradually emerge; on the cost side, affected by the slight decline in steel output, iron ore prices continue to fluctuate weakly, the fundamentals of coal and coke are weak, and there is still room for decline. On the sentiment side, the Sino-US London trade consultations have ended, falling short of market expectations. It is expected that the domestic steel market prices will continue to show a fluctuating and weak trend this week.

Lange: The current international environment is becoming more complex and severe. Economic globalization is facing headwinds, and trade protectionism and unilateralism are seriously impacting the international economic and trade order. There is great uncertainty in world economic growth, and the global supply chain is undergoing a rebalancing of cost, efficiency, and security. Global investment and development face new challenges. However, it should also be noted that positive progress has been made on investment agreements at the multilateral, bilateral, and regional levels, becoming new options for many countries. Competition among countries surrounding future industries and technologies is also becoming increasingly fierce, pointing out new tracks for global investment and development, and adding new impetus to investment cooperation in emerging fields such as digital and green. From the perspective of the black commodity futures market, black commodities fluctuated, with coking coal and coke achieving a slight intraday increase, while iron ore, rebar, and hot-rolled coils saw a slight intraday decline; from the perspective of the main 10 contract of rebar, it closed at 2969, down 6 points for the day, down 6 points from the previous week's close, and the weekly settlement price was 2973, up 16 points from the previous week. The latest holdings were 2.135 million lots, a decrease of 84,000 lots, with both long and short positions increasing and decreasing during the week, without showing a strong long or short direction. From the weekly structure, last week closed with a doji star, the price center is slightly higher than last week, the 2975 position is crucial, if it continues to operate above this position this week, there is still room for rebound; if it breaks below the intra-week low of 2940, it will continue to test the previous low near 2912. From the perspective of the steel spot market, on the supply side: due to the impact of profit and loss of varieties, the intensity of steel mill capacity release continues to weaken, pig iron production continues to decrease, and the output of varieties has also decreased year-on-year. On the demand side: due to various domestic and international factors, market speculative demand shows the characteristics of phased release, but the seasonal weather has gradually increased its impact on the terminal, and the market transactions of various varieties are inconsistent. On the cost side: due to the slight decline in iron ore prices, scrap steel prices are stable and tending to strengthen, and coke prices have fallen sharply, resulting in a continuous weakening of the support of production costs. Therefore, Lange Steel Research Center predicts that under the influence of the complex and severe external environment, China's economic resilience enhancement, the continuous weakening of supply release, the deepening of the off-season effect, and the continuous weakening of cost support, the domestic steel market this week (2025.6.16-6.20) may maintain a weak trend.

Tang Song: This week (June 13-20), the national weather situation is complex and changeable. The southern China region will experience heavy to torrential rain, and locally extremely heavy rain, due to the impact of typhoons, hindering construction progress; some parts of the north continue to experience high temperatures, coupled with the off-season effect of demand, the demand for construction steel may further decline. Overall demand is affected by high temperatures and rainy weather, hindering construction progress, weakening the demand for construction steel, and manufacturing demand is also relatively stable. Overall demand is weak, and the market trading atmosphere is light. At the same time, it is difficult to increase the speculative demand for steel trade, and the overall release of steel demand may decline slightly. From the supply side, some long-process blast furnaces have mid-year maintenance and production control plans, and the blast furnace operating rate may continue to decline slightly. At the same time, independent electric arc furnace production lines are affected by peak summer electricity consumption and production losses, and the output of rebar is likely to continue to decline. The overall supply of steel is expected to continue to shrink, but the current supply is still relatively high. As the off-season deepens, some steel mills may gradually implement production reduction measures, and supply pressure is expected to be alleviated to some extent, but the overall supply pattern remains relatively loose, and the market still needs to be wary of the risk of oversupply. The weakening of demand is more obvious, while the reduction in supply is relatively limited, and steel inventories may increase due to insufficient demand. Recently, the focus of market attention, the Sino-US negotiations, has come to a temporary conclusion. Although both sides have reached a framework agreement, the details of the agreement have not yet been announced. At the same time, the United States announced that it would impose additional tariffs on steel appliances starting from the 23rd, and trade friction is still ongoing, which has increased market risk aversion. Next, the economic data for May will be released successively. Considering the support of the "618" shopping festival and holiday effects, consumption is expected to rise. Overall, the domestic economy is running steadily, and consumption is performing well, which is expected to provide some support to the market. However, from the perspective of fundamentals, steel inventories may show an increasing trend. In terms of costs, the prices of raw materials such as iron ore and coke continue to run weakly, and the support of costs has weakened. Although the expected domestic economic data and geopolitical factors may provide some support to the market, and futures are at a discount to spot, there is resistance to the decline in futures, but the fundamentals cannot effectively drive the market, and the market sentiment is cautious. In addition, the sudden conflict between Iran and Israel has created uncertainty, leading to increased volatility in steel market prices and further exacerbating the market's wait-and-see mood. Therefore, it is expected that steel prices will adjust weakly this week, and the adjustment range may be limited. For the futures of rebar, the pressure level near 3000 can be focused on above, and once it breaks through, the trend of rebar is expected to change. Below, focus on the support near the previous low of 2912.

Youfa Group Han Weidong: I had the good fortune to exchange ideas with Mr. Zhu Junhong, Chairman of Shanghai Steel Union, and their excellent team over the weekend. I'd like to share some of my insights: The issue with coking coal in China is essentially a consequence of China's energy revolution, where the proportion of new energy sources is increasing year by year, leading to a gradual decrease in coal demand! The supply and demand relationship of iron ore has reversed, and it will continue to decline in the future. Total steel demand this year will fall by more than 10 million tons, not the 50 million tons widely expected by society. It will decline slowly over the next three years. While the turning point in steel demand has arrived, it will not be a cliff-like drop. Prices are not expected to see a particularly sharp decline. When the current market stabilizes will depend mainly on when steel production is reduced. While there is a possibility of administrative production restrictions, this will likely occur when most steel mills are losing money, as only then will a unified demand from top to bottom be easily formed. The future stabilization of coal and ore prices will also return to a point where reduced output matches demand. The oversupply of steel, coal, and ore will be a relatively long process, and we need long-term strategies to deal with this cycle. For now, we must weather this period that forces steel mills, coal, and ore mines to reduce production. Avoid speculation!