Experts say the city - August 4

My Steel: In terms of supply, the supply of major steel varieties last Friday was 867.42 tons, a week-on-week increase of 0.45 tons, or 0.1%. Last Friday, the output of major steel varieties decreased week-on-week except for hot-rolled and cold-rolled steel. The core driver was short-term maintenance and iron transfer at some steel mills. In terms of inventory, the total inventory of major steel varieties last Friday was 13.5189 million tons, a week-on-week increase of 153,900 tons, or 1.15%. The total inventory of major varieties last Friday increased week-on-week: factory inventory increased week-on-week, with the increase mainly from wire rod. Social inventory decreased week-on-week, with the decrease mainly from rebar. In terms of consumption, the weekly consumption of major varieties last Friday was 8.5203 million tons, down 1.9%; among them, the consumption of construction materials decreased by 7.1% week-on-week, and the consumption of plates increased by 4.2% week-on-week. Last Friday, the apparent consumption of major varieties showed a decrease in construction materials and an increase in plates, reflecting the seasonal impact of the off-season. On the supply side, some steel mills have short-term maintenance and iron transfer, but the overall profit of steel mills is still acceptable, and the willingness of steel mills to produce has not decreased significantly. It is expected that production will continue to increase. On the demand side, the contradiction between off-season demand is gradually emerging, consumption has declined week-on-week, and the sustainability of consumption is weak. The inventory of major steel varieties last Friday increased slightly, and the pressure on the fundamentals has emerged. In terms of cost, the fourth round of price increase of coke has been implemented, and the fifth round of price increase has been initiated. The game between coke and steel has intensified, and cost support still exists. Overall, the contradictions in the fundamentals of steel have emerged, but there is still cost and military parade expectation support. It is expected that steel prices will mainly fluctuate in the short term.

Steel Home: Following the conclusion of the Central Political Bureau meeting, the upward trend driven by a series of macroeconomic benefits such as "anti-involution and expanding domestic demand" from the Central Financial Committee since July 1 has come to an end, and the market will return to the fundamentals of strong supply and stable demand. First, steel mills are making substantial profits and have high production enthusiasm. Recently, the blast furnace and electric arc furnace operating rates surveyed by Steelhome website have continued to rise to high levels; second, demand is basically stable, but there is pressure from supply-demand imbalance. Steelhome's survey shows that steel inventories have increased slightly for two consecutive weeks, coupled with weaker sentiment among downstream and traders, once the market adjusts, procurement may slow down, increasing market supply pressure. However, the possibility of a significant adjustment in steel prices is low. First, steel costs have risen significantly, with coal and coke prices rising continuously recently, and iron ore prices shifting upward, providing cost support for steel prices; second, China and the US will continue to push forward the temporary imposition of tariffs for 90 days, which is good for foreign trade exports. In the short term, it is expected that domestic steel market prices will continue to adjust slightly this week. In the medium term, steel prices will show a trend of rising bottom and fluctuating upward. Operationally, it is advisable to cautiously wait and see and mainly avoid risks in the short term.

Lange: China's economic operation is still facing many risks and challenges. We must correctly grasp the situation, enhance our awareness of risks, adhere to the bottom-line thinking, make good use of development opportunities, potential, and advantages, and consolidate and expand the momentum of economic recovery; we must implement more proactive fiscal policies and moderately loose monetary policies, and fully release policy effects; accelerate the issuance and use of government bonds, and improve the efficiency of fund use; monetary policy should maintain ample liquidity and promote a decline in comprehensive social financing costs; we must deeply implement special actions to boost consumption, and while expanding commodity consumption, cultivate new growth points for service consumption; we must promote high-quality "two-heavy" construction, stimulate the vitality of private investment, and expand effective investment. From the perspective of the black series futures market, the black series fell overall, experiencing large fluctuations last week; among the main contracts, the decline in coking coal and coke was still ahead, with coking coal falling by more than 7% in a single day, while the decline in hot-rolled coils and iron ore was smaller, and rebar fell by more than 1%. Specifically, the main contract of rebar closed at 3203, down 40 points for the day, down 153 points from the closing price last Friday, and the weekly settlement price was 3284, up 14 points from last week. The latest position was 1.76 million lots, a decrease of 440,000 lots from the highest 2.2 million lots. During the week, funds entered and exited the market with the large fluctuations in the market, suffering heavy losses. From a morphological point of view, last week's decline from a high level was large, suppressing the upward momentum, and has already recovered most of the gains from the previous week. This week will continue to fluctuate and adjust, with a reference operating range of 3150-3290. 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, and the output of iron has slightly increased, but the output of varieties has turned from rising to falling. On the demand side: due to the continuation of Sino-US trade frictions and the impact of the economic work conference policies that did not meet expectations, the black series futures and spot markets showed a clear trend of rising and falling, and market speculative demand quickly shrank. On the cost side: due to the slight decline in iron ore prices, the slight decline in scrap steel prices, and the significant increase in coke prices, the support of production costs maintains a certain resilience. Therefore, Lange Steel Research Center predicts that under the influence of continuous economic risks and challenges, the accelerated implementation of previous policies, the continued increase in supply release, the rapid shrinkage of speculative demand, and the maintenance of resilience in cost support, the domestic steel market this week may fluctuate and weaken.

Tang Song: This week, there will be heavy rain and high temperatures in southern China, scattered rainfall and local high temperatures in northern China. Unfavorable weather will put seasonal pressure on terminal demand, and the release of domestic demand will be limited. In terms of exports, the volume of steel exports is expected to decrease slightly due to rising costs and the trade environment. However, some investors still have some speculative procurement demand based on low prices, but the overall scale is limited. Overall, the overall demand is expected to decrease slightly. From the supply side, steel companies' profits are still acceptable, and the willingness to reduce production is not strong, which keeps steel production at a high level. The profits of independent electric furnaces are at the breakeven point, and operations are adjusting narrowly. Overall, the overall supply of the steel market remains at a high level with narrow fluctuations. This week, overall, it is expected that the supply side will remain stable at a high level, the demand side will remain at a low level, and inventories will fluctuate slightly. Recently, the steel market has fluctuated sharply under the intertwined influence of policy expectations, trade relations, and military parade production restriction news. Among them, policy news factors have become the key to dominating market sentiment and price fluctuations. From the news last week, the overall trend is bearish. Internationally, the intensification of trade frictions and the uncertainty of inflation data have put considerable pressure on the steel market; domestically, the policy tone of the Political Bureau meeting did not fully meet market expectations, and the slowdown in manufacturing prosperity has also had a significant inhibitory effect on steel demand. Although the National Development and Reform Commission has introduced a series of policy measures to provide certain support for the market, market expectations have not been significantly improved, and market enthusiasm for price increases has cooled significantly. However, the market still has expectations for subsequent policies. Various departments are expected to implement the spirit of the Political Bureau meeting and introduce specific measures in the near future. In addition, on July 18, the Ministry of Industry and Information Technology stated that the steel industry's steady growth plan is about to be launched, which means that subsequent steady growth policies for the steel industry are expected to be implemented soon. At the same time, there are still certain expectations for anti-involution policies, military parade production restriction policies, and annual crude steel production control policies, which will provide certain support for the market and create conditions for market rebound. Overall, it is expected that the steel market will fluctuate and adjust in the short term, and the policy rhythm will determine the time and intensity of the rebound. The short-term break of the rebar futures below 3200 has increased the probability of inertial exploration to 3100 if it quickly falls below 3150; once 3100 is effectively broken, the logic of this round of rebound will be completely ended, and the medium-term trend will turn bearish. It is expected that the rebar futures will fluctuate weakly in the range of 3150/3100-3260 within last week, and operationally, the focus should be on the support strength of 3150 and 3100.

Youfa Group Han Weidong: "A violent wind does not last the whole morning, nor does a heavy rain last the whole day!" The tumultuous price surge has passed, and the market has returned to fundamentals! This year, we have consistently positioned the market as operating within a range-bound fluctuation. After the US tariff war subsides, we will observe the damage and harm it inflicts on the world; this is a confirmed gray rhino! After this systematic adjustment in the stock market, bulk commodities, and ferrous metals, we will focus on the fundamentals. Steel prices will stabilize before production restrictions, while the game of coal, coke, and ore is more complex, involving the overall balance of futures, spot markets, upstream and downstream industries, and imports. Overall, in the first half of the year, there were disturbances from tariffs and economic expectations, and prices were underestimated. In the second half of the year, the average steel price will be higher than in the first half, but with greater volatility. Positive impacts include the production restrictions for the military parade and the intensity of annual production restrictions before the end of the year. Negative impacts include the reduction in exports and indirect exports. September last year and June this year formed the low points of the fluctuation, while industry-wide risk aversion, destocking, and especially winter storage prices constrained the high point of the second half of the year. Looking at the international situation, the global free trade system formed after China's accession to the WTO has been disrupted and needs to be rebuilt. For China, the counter-involution will be a major influencing factor in the next few years. China's dual carbon strategy and the current counter-involution are somewhat similar; they meet China's needs and the world's needs!