Experts say the city - June 23

My Steel: On the supply side, the supply of major steel varieties last Friday was 868,510 tons, a week-on-week increase of 96,600 tons, or 1.1%. Last Friday, the output of major steel varieties increased week-on-week except for cold-rolled steel. The core driver is that steel mills' profits are still acceptable, and some steel mills have resumed production on some production lines. In terms of inventory, the total inventory of major steel varieties last Friday was 13.3889 million tons, a week-on-week decrease of 156,700 tons, or 1.2%. The total inventory of major varieties last Friday decreased week-on-week: factory inventory decreased week-on-week, with the decrease mainly from wire rod; social inventory decreased week-on-week, with the decrease also mainly from wire rod. In terms of consumption, the weekly consumption of major varieties last week was 8.8418 million tons, an increase of 1.9%; among them, the consumption of construction materials increased by 1.3% week-on-week, and the consumption of plates increased by 3.6% week-on-week. Last Friday, the apparent consumption of major varieties showed a dual increase in construction materials and plates, and the current demand for finished steel still has a certain resilience. On the macroeconomic side, the Lujiazui meeting released policy signals from the central bank, but the statements still mainly focused on programmatic requirements, and specific policy details have not been released, so the market-boosting effect is limited. However, geopolitical conflicts have continued recently, and crude oil prices have risen sharply, causing disturbances to the sentiment of the ferrous metals market. On the supply side, due to the overall acceptable profits of steel mills, the output of major materials increased slightly last Friday, but there is still an expectation of a decrease in the later period of the off-season. On the demand side, as of June 17, the capital availability rate of sample construction sites was 59.05%, a week-on-week increase of 0.02 percentage points. Among them, the capital availability rate of non-residential construction projects was 60.97%, a week-on-week decrease of 0.03 percentage points; the capital availability rate of residential construction projects was 49.51%, a week-on-week increase of 0.32 percentage points. The demand side still has resilience. The market still expects a fourth round of price cuts last week, and the support of raw material costs is limited. Overall, macroeconomic external uncertainties are causing disturbances, the supply and demand contradiction of finished steel is still accumulating, raw material costs may decline, the core driving force of steel prices is insufficient, and the short-term trend is likely to be mainly volatile.

Steel Home: The main characteristics of the current domestic steel market are high output, low expectations, weak balance, and uncertainty. Although the output of crude steel and steel in May both fell month-on-month, the decrease was not large. Judging from the blast furnace and electric arc furnace operating rates surveyed by Steel Home, steel mills' production is basically normal; against the backdrop of continuously falling steel prices, merchants are generally not optimistic about the future market and mainly operate with low inventories. From the demand side, the steel market is facing the impact of the traditional off-season, and the weakening of the trade-in effect and the increasing pressure of foreign trade exports also affect the direct or indirect export of steel, increasing the pressure on domestic supply, while the ongoing conflict between Iran and Israel has further increased the uncertainty of the foreign trade environment. It is expected that the domestic steel market price will continue to fluctuate and weaken this week.

Lange: In the face of the rapidly changing and complex international environment, under the strong leadership of the Central Committee of the Communist Party of China, various regions and departments have accelerated the implementation of more proactive and effective macroeconomic policies, focusing on stabilizing employment, enterprises, markets, and expectations, focusing on expanding domestic demand, promoting the integration of technological innovation and industrial innovation, strengthening the domestic cycle, effectively responding to external changes, maintaining overall stability in economic operation, continuing to improve some indicators, growing new momentum, and continuing the trend of high-quality development, demonstrating the strong resilience and vitality of China's economy. From the perspective of ferrous metals futures, last week, coke rose by 2.9%, coking coal rose by 2.78%, rebar and hot-rolled coils rose by 1.05% and 1.47%, and iron ore remained flat; from the perspective of the main rebar contract, today's closing price is 2992, up 7 points, up 23 points from the closing price last Friday; the weekly settlement price is 2984, up 11 points; the latest open interest is 2.164 million lots, an increase of 28,000 lots from last Friday. The daily line has been consolidating for 12 trading days, and the weekly line has seen a slight upward shift in the price center for two consecutive weeks, but the strength is very limited. This week, we will continue to pay attention to whether the 3000-point mark can be firmly held. If it cannot rise above the 3000-point mark, there will be considerable pressure near this level, and if negative sentiment is released, a pre-suppressed decline is likely to occur. From the perspective of the steel spot market, on the supply side: due to the impact of the profitability of different varieties, the intensity of steel mill capacity release has shifted from weak to strong, pig iron production has slightly increased, while the output of different varieties has varied. On the demand side: due to the significant impact of seasonal weather on the end-users, the market transactions of various varieties are not ideal. On the cost side: due to the slight decline in iron ore prices, scrap steel prices have risen steadily, and coke prices have remained stable, so the support of production costs remains resilient. Therefore, Lange Steel Research Center predicts that under the influence of complex changes in the international environment, strong resilience of the Chinese economy, the shift from weak to strong in supply release, the deepening of the off-season effect, and the maintenance of cost support resilience, the domestic steel market will continue to decline weakly this week.

Tang Song: The steel market operating environment is complex this week. In terms of weather, rainfall in the south is gradually weakening, and temperatures are slowly rising, but high temperatures persist in some parts of the north, and some areas still have showers or thundershowers. Affected by this, the off-season effect of demand continues, the demand for construction steel remains weak and stable, the demand for manufacturing is also relatively stable, and the overall demand performance is generally weak. Speculative demand for steel trade is difficult to increase due to cautious market sentiment, and overall steel demand remains weak and stable. On the supply side, some areas such as Tangshan are implementing emission reduction measures, and the blast furnace operating rate is expected to decline slightly. 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. Overall steel supply will decrease slightly. Steel inventories are expected to maintain a narrow decline. Recently, tensions in the Middle East continue, and geopolitical events such as the conflict between Iran and Israel continue to ferment. Although the direct impact of these events on the steel market is relatively limited, the volatility of international crude oil prices still has a certain impact on energy costs, which in turn increases market risk aversion. Domestically, the economic data in May was generally stable, but fixed asset investment and real estate-related data were weak. Market expectations for policy efforts have increased, but the uncertainty of policies and the unevenness of economic recovery are still affecting market confidence to a certain extent. From the perspective of the fundamentals of the steel market, the demand side shows a weak and stable performance, while the supply side maintains high operation, forming a certain balance, but the supply and demand contradiction still exists. In terms of costs, the fourth round of price cuts for coke is expected to be implemented this week, and the supply of iron ore will also gradually become looser, and the overall support of steel costs continues to weaken, and the fundamentals are difficult to effectively drive the market. Overall, the international macroeconomic market and geopolitical situation still face many uncertainties, and market cautious sentiment is strong. Therefore, it is expected that steel prices will fluctuate and adjust this week. For the rebar futures contract, the upper pressure levels to watch are around 3014/3035, and the lower support level is around the previous low of 2960.

Han Weidong, Youfa Group: More than twenty days have passed in June. Demand has slightly decreased month-on-month and remained flat year-on-year. The market maintains a volatile pattern. The price difference between the highest and lowest prices of Tangshan strip steel in the past 20 days is only 40 yuan. The total inventory of steel nationwide is still stubbornly decreasing. Changes in the international political situation are also disturbing bulk commodities. Since the beginning of this year, we have consistently emphasized that there are no major opportunities this year; it's a lackluster market, and there is no winter storage. From January to May this year, the average monthly price of Tangshan strip steel only differed by 90 yuan, making speculation impossible. After the Spring Festival, we advised everyone to reduce inventory when prices rise, and to reduce inventory at the latest before the off-season arrives. In June, the off-season arrived, with a month-on-month decrease of only about 100 yuan, followed by continuous horizontal fluctuations. Regarding the second half of the year, according to the macroeconomic analysis of Lange Steel Information's Steel Strategy, demand may not be particularly strong, and there will be a certain decrease compared to the first half of the year and the second half of last year. Therefore, the market balance in the second half of the year mainly relies on production reduction. Before a certain scale of production reduction occurs, we should maintain stable operations and wait patiently! If ultra-low prices and steel mill production cuts occur in the second half of the year, then the opportunity will come!