Experts say city—September 1

My Steel: Supply side: Last week, the supply of five major steel products was 8.8461 million tons, a week-on-week increase of 65,500 tons, an increase of 0.7%. Steel production rose this period, with rebar and wire rod production increasing significantly; last week, the total inventory of the five major steel products was 14.6788 million tons, a week-on-week increase of 268,400 tons, an increase of 1.9%. The inventory changes for construction steel and plate steel were consistent, both maintaining stock accumulation; consumption side: last week, the weekly consumption of the five major products was 8.5777 million tons, with construction steel consumption up 4.2% week-on-week, and plate steel consumption down 1.2% week-on-week. Among the five major products last week, consumption changes for construction steel and plate steel diverged. On the supply side, current steel demand is at the transition point between off-season and peak season. Although steel profits have been compressed, overall steel mills have little willingness to cut production, and the space for production decline is limited. For rebar, short-term supply will continue to fluctuate around 2.2 million tons per week; inventory-wise, last week inventory continued to increase and total volume has exceeded last year's level, with expected relatively high pressure to reduce inventory later, and inventory year-on-year will remain at a relatively high level; for hot-rolled coil, on the supply side, steel mills' reduction in September may be slightly higher than in August, expected to decrease by 3,000 tons per day on average. On the demand side, domestic manufacturing orders continue to maintain normal levels, and peak season demand remains resilient. It is expected that demand differentiation among steel products will continue this week. As the environmental production restrictions and shutdowns in Tangshan are about to be implemented, price volatility in the black commodity sector will increase, maintaining wide fluctuations in the short term.

Steel Home: Recently, the domestic steel market has generally been weak and volatile, but favorable factors are gradually increasing. First, downstream demand is gradually shifting to the peak season, with stronger expectations for demand recovery, especially for outdoor construction; second, steel mills have little pressure on plate orders, especially medium and thick plates, and the seasonal recovery of construction steel demand will also ease market pressure; third, rising production costs at steel mills provide some price support; fourth, this week there are military parades and the Shanghai Cooperation Organization summit, which impose certain production restrictions on some steel mills. Overall, current supply and demand are basically balanced, steel inventory accumulation has slowed, and it is expected that domestic steel market prices will fluctuate with a slight upward bias this week. Key focus is on the impact of the September 3rd military parade on steel mills, changes in steel inventory, and the influence of black commodity futures on the spot market.

Lange: Currently, China's economic operation still faces many unstable and uncertain external factors. Residents' consumption capacity and confidence need further improvement, enterprises face intensified competition and declining investment returns, among other risks and challenges; focus should be on planning and reserving a batch of key projects needed for development, feasible for localities, and expected by the public, especially in the livelihood sector; also, unswervingly implement the strategy of expanding domestic demand, further strengthen the internal circulation, optimize the external circulation, and promote the dual circulation. From the black commodity futures market, most black commodities closed lower, with the main iron ore contract slightly up. The main rebar contract 2601 closed at 3160, down 22 points, with open interest at 1.429 million lots, an increase of over 170,000 lots. As the new main contract, short positions increased continuously in the afternoon, forming downward pressure. From the weekly chart, it fell 35 points from last week's closing price, with a settlement price of 3191, down 23 points for the week. Although the decline is not large, the center of gravity has shifted downward. Latest open interest is 1.429 million lots, an increase of 491,000 lots from last Friday. The weekly chart has fallen for two consecutive weeks without signs of stabilization, cautioning against further declines. This week, pay attention to support at 3152 below, with post-decline support around 3117. From the steel spot market perspective, supply side: due to the impact of product profitability, steel mill capacity release continues to weaken, pig iron production slightly decreased, but product output varies. Demand side: due to the transition from off-season to peak season, market merchants' stocking demand gradually increases, and market transactions begin to recover. Cost side: due to slight increases in iron ore prices, stable to rising scrap prices, and slight increases in coke prices, production cost support has shifted from weak to strong. Therefore, Lange Steel Research Center expects that under the influence of many external uncertainties, steady economic operation with progress, gradual relaxation of production restrictions, continued weakening of supply release, gradual recovery of market transactions, and strengthened cost support, the domestic steel market may fluctuate weakly this week.

Tang Song: This week the market enters the 'Golden September' period. The south experienced mostly rain early on, then clearing; the north had significant early rain, then improved weather; the transition from off-season to peak season is underway, with military parade production restrictions and shutdowns ending, and demand is expected to recover somewhat. Speculative demand is expected to grow as prices weaken and valuations reach a neutral to low level. Demand is expected to gradually and slightly recover this week. On the supply side, parade controls have tightened: from August 20 to September 6, independent rolling steel enterprises in Tangshan are shut down; from August 26 to September 4, steel enterprises' sintering production is limited by 30-40%; from August 31 to September 3, Tangshan blast furnaces plan to reduce production by 30-40%. Other regions also have varying degrees of restrictions. Overall, this week enters a stricter phase of sintering and blast furnace production restrictions, with expected slight supply reduction. Additionally, independent electric furnace profits are slightly negative, and rebar production is slightly reduced. In summary, the steel market's overall supply is slightly reduced. Overall, steel supply is expected to slightly decrease this week, balancing with low-level demand recovery, improving the supply-demand contradiction week-on-week, and reducing the rate of inventory accumulation. Currently, the market shows some concern over high supply and continuous inventory accumulation, with insufficient confidence in the extent of upcoming peak season demand release. Under high supply, market negative feedback concerns are heavy, and a one- to two-week observation period may be needed to repair market sentiment. This week will enter the strictest phase of parade production restrictions, expected to ease supply-demand contradictions and provide room for week-on-week improvement. Although the extent of demand release after the parade remains uncertain, the market expects concentrated demand release, and speculative demand still exists. PMI data for August will be released over the weekend. It is expected that China's manufacturing PMI for August 2025 may be around 49.5%, slightly up from July. Although still in contraction territory, the slight rise indicates economic improvement. Additionally, US non-farm payroll data will be released on September 5, with rate cut expectations likely to boost the market again. Furthermore, with the introduction of the steel industry's steady growth plan by five ministries, subsequent crude steel regulation details are expected to be implemented gradually, which will strongly support market expectations. Overall, the steel market is expected to operate weakly first and then strengthen this week. The main rebar contract 01 should focus on support around 3100-3125; if broken, the market may fall below 3000, with resistance near 3200 and 3240.

Youfa Group Han Weidong: This week brings important meetings and events. Take a good rest and feel the strong atmosphere of the motherland. Entering September, the most important factors are "resumption of production" and "production restrictions," which determine whether market prices go down or up. If there is only resumption of production after the "events" without policy-driven production restrictions, then all future price increases will be opportunities to reduce inventory, and if prices fall, just wait for low-price winter storage. Why can low prices be used for winter storage this year? Mainly because the major policy direction of "anti-involution" has been set, and the steel industry's steady growth plan has been released. The execution strength is just the twists and speed in the process of moving forward. If coal mine production restrictions are strong, prices and costs will be pushed up; if not, now is the best time. The steel production restrictions will not be particularly strong unless it is losing money, because the statistics bureau's data has already been largely adjusted. Why does the market only focus on supply? Because demand in the second half of the year will not have unexpected highlights. Demand in July and August was basically flat or slightly lower compared to last year, and last year's base was very low. Overall demand in the second half of the year is less than in the first half, so the market's hope lies on the "supply side." To summarize, if the market rises later, treat it as a benefit to put in your pocket; if it falls, wait for the bottom to start winter storage early and wait for the next rise... The market capitalization of the Chinese stock market has increased by more than 20 trillion yuan compared to September last year, benefiting all investors!