Experts say the city - June 30

My Steel: In terms of supply, the supply of major steel varieties last Friday was 8.8099 million tons, a week-on-week increase of 124,800 tons, or 1.4%. Last week, the output of both long and flat steel products increased, mainly due to the resilience of current demand and the fact that steel mills still have marginal profits, thus driving a short-term increase in output; last Friday, the total inventory of major steel products was 13.4003 million tons, a week-on-week increase of 11,400 tons, or 0.1%. Although the total inventory of the five major varieties last Friday turned from a decrease to an increase, the increase was smaller than expected. From the perspective of inventory structure, the pressure of inventory accumulation last week mainly reflected in factory inventories, while social inventories continued to decline; in terms of consumption, the apparent weekly consumption of the five major varieties last week was 8.7985 million tons, a week-on-week decrease of 0.5%: among them, the consumption of construction materials decreased by 0.9%, and the consumption of flat steel decreased by 0.3%. Last week, the decrease in the consumption of construction materials among the five major steel varieties was relatively small, reflecting that the impact of the rainy season on demand has not deepened further, and the overall demand is relatively resilient. Overall, last week, the supply of the five major steel varieties increased and demand decreased, inventories turned from a decrease to an increase, and the pressure on the fundamentals increased marginally. In terms of supply, the expectation of a further decline in demand is not strong, and the characteristic of "not being weak in the off-season" is becoming apparent. Coupled with the risk of a gradual weakening of steel exports, the supply pressure may shift inward; in terms of demand, after the rainy weather, there is still the impact of high temperatures, so the demand for construction materials will remain weak in the short term, but the room for further decline may be limited; however, due to the fact that the follow-up national subsidy funds will still be in place, the resilience of demand exists. In terms of inventory, it is obvious that the current inventory has entered the accumulation cycle, but the short-term pressure of inventory accumulation may be limited, so it may later increase production to promote the accumulation of fundamental contradictions. Overall, in the short term, under the situation where the contradictions of the fundamental reality are not obvious, the room for steel prices to continue to fall may be limited. Therefore, in the short term, it may be possible to drive the increase in output through stable prices and price increases to promote the accumulation of fundamental contradictions and lay the groundwork for the negative feedback market in the later period.

Steel Home: After the end of the Israeli-Palestinian conflict, the steel market returned to the fundamentals. The characteristics of the current off-season consumption are becoming more obvious, with steel transactions weakening, inventories turning from decline to increase, and supply pressure beginning to increase. First, downstream demand is in the traditional off-season consumption, coupled with high temperatures and heavy rains in some areas, limiting outdoor construction, resulting in weak supply and demand for construction steel, while the flat steel market is facing pressure from high supply; second, the transaction volume of major steel products has generally fallen, inventories of construction steel have turned from decline to increase, and inventories of flat steel have increased slightly for four consecutive weeks, with merchants lacking confidence; third, the fourth round of price reductions for coke has been implemented, the central price of iron ore has shifted downward, the cost of steel has continued to decline, steel mills still have certain profits, and production enthusiasm is high. A positive factor is that China and the United States have further confirmed the details of the framework for trade talks in London, reducing uncertainty in the external environment and helping to boost market sentiment. It is expected that the domestic steel market price will fluctuate and run in a "rise-then-fall" pattern this week. In the short term, we should focus on changes in steel mill production and inventories, and the details of the China-US London framework.

Lange: Since the beginning of this year, China has continued to promote the implementation and effectiveness of policies to encourage the replacement of large durable consumer goods, effectively stabilizing market expectations; it has continued to consolidate the stable situation in the real estate market and accelerate the construction of a new model for real estate development; it has continued to increase efforts to promote steady growth and improvement in the quality of foreign trade production enterprises, and promote the integrated development of domestic and foreign trade; it has continued to promote the innovative development of enterprises in high-end equipment manufacturing, intelligent photovoltaic, clean energy, new materials, etc., and comprehensively rectify involutionary competition, developing new productive forces in a way that suits local conditions, which has enabled the economy to withstand pressure and maintain a positive trend. From the perspective of the black commodity futures market, the black commodity sector rose across the board, with the main contract of coking coal leading the way with a daily increase of 4.89%, followed by coking coal with an increase of 2.52%, iron ore with an increase of nearly 2%, and rebar and hot-rolled coils with relatively small increases of less than 1%. Looking at the main contract of rebar, it finally closed at 2995, up 29 points for the day, up 3 points from the closing price of last week, and the weekly settlement price was 2981, down 3 points from last week. The latest position was 2.14 million lots, a decrease of 20,000 lots from last week, and a single-day decrease of 48,000 lots on Friday, with short positions experiencing concentrated reductions. Looking at the weekly chart, the price center has shifted upward for four consecutive weeks, showing signs of continued rebound, and the 3000 mark should be noted above. From the perspective of the steel spot market, on the supply side: due to the impact of the profit and loss of varieties, the intensity of steel mill capacity release continues to increase, pig iron production continues to increase, and the output of varieties has also increased. On the demand side: due to the significant impact of seasonal weather on the terminal, the market transactions of various varieties are not ideal. On the cost side: due to the steady decline in iron ore prices, the slight fluctuation in scrap steel prices, and the slight decline in coke prices, the support of production costs has weakened. Therefore, the Lange Steel Research Center predicts that under the influence of continuous disturbances from geopolitical conflicts, China's economy withstanding pressure, the continued increase in supply release, the deepening of the off-season effect, and the weakening of cost support, the domestic steel market this week may experience a weak rebound.

Tang Song: This week, there will be more rainy weather in southern China and sporadic showers in northern China. The construction progress of downstream industries such as infrastructure and real estate will slow down, and the space for steel demand release will be limited. Entering July, demand will still maintain a seasonal weakness and will not be able to provide strong support for steel prices. The economic recovery is still facing certain pressures. Although there has been improvement in the domestic market, the recovery of demand is still insufficient, and the external market is also facing the challenge of weak global economic recovery, which may have a certain inhibitory effect on the expansion of manufacturing production. The expected PMI of China's manufacturing industry in June may be slightly lower than that in May, indicating that the expansion rate of overall economic activity has slowed down, further restricting the release of steel demand. From the supply side, some long-process blast furnaces are undergoing alternating maintenance and resumption of production, and the blast furnace operating rate is expected to change little, with the overall supply volume remaining relatively high. However, due to the peak summer and production losses, the output of rebar from independent electric arc furnaces is likely to continue to decline, but this decline may not be enough to change the overall situation of relatively sufficient supply. Steel inventories have increased and decreased slightly, and there is some pressure to reduce inventories in the market. The market's expectations for a US interest rate cut and the optimistic expectations for the international trade situation are still continuing. On the one hand, the market generally expects that the Federal Reserve may adopt a more relaxed monetary policy in the near future, and this expectation has led to a continuous weakening of the US dollar. On the other hand, traders expect to reach a trade agreement before the US tariff deadline in July, and optimistic sentiment has helped stabilize market confidence, which in turn has provided strong support for commodity prices and helped the commodity market to continue its upward trend. In terms of steel, the overall steel market maintains a fragile supply-demand balance. In terms of cost, the active reduction of coke production has increased, and the regional safety inspection of coal has been tightened, strengthening the resistance of coke and coal. The reduction of pig iron is not obvious. With the support of rigid demand for raw materials, the support of raw material prices for steel costs has increased compared with last week, but it is not enough to support the steel market to break out of a one-sided trend. Overall, the positive factors in the macroeconomic environment provide some support for the commodity market, but the steel market, under the dual effects of weak supply-demand balance and cost support, has a relatively complex trend. It is expected that the steel price will fluctuate and adjust this week. For the futures of rebar, the pressure level near 3030/3050 can be observed above. Below, pay attention to the support near the previous low of 2980 and 2985. If the price falls below this area, it can be regarded as the end of the strong adjustment in the market.

Han Weidong, Youfa Group: Recently, the international and domestic situations have been relatively mild, and the prices of raw materials have shown signs of rebounding from the bottom, blocking the illusion of negative market feedback. Even if steel prices fall in the future off-season, the decline will be smaller, within everyone's acceptable range, making it possible to smoothly get through the off-season. However, the market will not see an upward trend; this miracle will not happen. If later demand is stronger, it will only fluctuate slightly upward; if demand is weaker, it will go down a bit until it forces steel mills to reduce production, forming a new balance. Market opportunities will definitely be closely related to production cuts; just focus on this condition. A well-known domestic website predicts that next month's average strip steel price will only be 50 yuan lower than in June. Speculation is not feasible; continue with steady operation!