Experts say the city—October 13

My Steel: On the supply side, last Friday, the supply of the five major steel products reached 8.6331 million tons, a week-on-week decrease of 37,600 tons, or 0.4%. This week, steel production declined slightly, with the most notable drop observed in rebar output. Meanwhile, total steel inventories for the five major products stood at 16.0072 million tons last week, increasing by 1.2786 million tons from the previous week—representing an 8.7% rise. Overall, inventories of the five key steel varieties continued to build up, particularly in construction materials and plate products, which also showed a consistent pattern of inventory accumulation. In terms of consumption, the five major steel products recorded weekly demand of 7.5143 million tons last week. Notably, construction material consumption fell by 32.8% week-on-week, while plate consumption declined by 7.8%. Among the five product categories, the consumption patterns for construction materials and plates remained aligned. With factories resuming operations after the holiday period, downstream steel demand has gradually begun to recover. As a result, the significant inventory buildup observed last week is now starting to ease. However, as we’ve already passed the peak season for steel demand, iron ore and hot-rolled coil production remain at historically high levels. Consequently, the balance between supply and demand for steel continues to face considerable pressure. In the short term, steel prices may experience volatile declines, driven by factors such as oversupply and the slow pace of demand recovery. Meanwhile, with the upcoming Fourth Plenary Session of the Communist Party of China in mid-to-late October, market sentiment could once again be influenced by positive macroeconomic expectations. Investors should closely monitor the pace at which steel demand rebounds post-holiday, as well as any developments stemming from key macroeconomic events.

Steel Home: After the holiday period, domestic steel market prices have generally remained stable with slight fluctuations. Looking ahead, the market will primarily face four key challenges: First, high inventory levels—after the holiday, inventories of the five major steel product categories reached their second-highest level in nearly five years, with steel mill stocks hitting their highest point in the same period. Notably, the increase in inventory during the National Day holiday was the largest in the past five years. Second, elevated production—currently, steel mills maintain a blast furnace utilization rate of around 91%, showing virtually no signs of output cuts. Third, weak demand—post-holiday sales of major steel products have all fallen short of the same period last year, and neither traders nor downstream users are actively replenishing their stockpiles. Fourth, significant market disruptions—following the U.S.'s imposition of discriminatory port fees on Chinese ships and the implementation of selective sanctions against certain entities, China has firmly retaliated. This has reignited the U.S.-China tariff conflict, prompting President Trump to threaten to impose an additional 100% tariff on Chinese imports starting November 1. As a direct result, global markets and commodity prices have experienced sharp declines. Overall, it is expected that domestic steel prices this week will likely fluctuate downward.

Lange: Currently, the factors driving economic recovery under existing policies are locked in a fierce battle with market-driven forces that are pushing the economy into contraction. To significantly strengthen counter-cyclical macroeconomic policy adjustments and markedly expand government investment in public goods and services, we must effectively stimulate an increase in corporate orders, thereby boosting business production and investment activities, and ultimately leading to sustained improvements in employment conditions. It is crucial to leverage sufficiently robust government investment to invigorate both corporate investment demand and consumer spending among residents, helping China's ultra-large domestic market swiftly reverse its contractionary trajectory and transition back onto a path of steady, robust expansion. Looking at the black commodity futures markets, most black commodities closed higher overall, with the main contracts for coking coal, coke, and iron ore surging by more than 1%. Meanwhile, rebar and hot-rolled coil saw relatively smaller gains. Specifically, the January rebar contract ended at 3,103 yuan, up 16 points from the previous day—and gaining 31 points compared to last week. The weekly settlement price stood at 3,098 yuan, slightly lower by 1 point from the prior week. Current open interest has reached 1.926 million contracts, an increase of 52,000 lots since before the holiday period, as capital gradually returns following the break, intensifying the tug-of-war between bulls and bears. At present, both sides remain locked in a tight standoff around the 3,100 mark. This week, key attention will be focused on two critical price levels: last week’s low of 3,093 yuan and the resistance level above it at 3,124 yuan. If 3,093 can successfully act as a floor, there’s a high probability that prices will eventually break upward through 3,124 yuan. Turning to the spot steel market, on the supply side, steelmakers continue to maintain a steady pace in releasing capacity, influenced by profit margins across different product lines as well as expectations for the peak season. Meanwhile, molten iron production remains stable, though output trends vary significantly among individual product categories. On the demand side, market participants’ lukewarm expectations for the "Golden October" period have led to notably volatile trading activity. From a cost perspective, minor upticks in iron ore prices, coupled with slight fluctuations in scrap steel and coking coal costs, have bolstered production expenses, lending resilience—and even strengthening—to the overall cost structure. Given these dynamics—marked by intense policy-driven economic competition, subdued seasonal demand expectations, stable supply conditions, erratic market trading, and increasingly resilient cost support—Lange Steel Research Center anticipates that China’s domestic steel market may experience weak, oscillating price movements this week.

Tang and Song Dynasties: After this week's National Day holiday, downstream industries are gradually resuming construction activities. As we enter the traditional peak season for construction projects, favorable weather conditions are conducive to outdoor work, which could lead to a modest yet further rebound in end-demand—particularly in infrastructure development and real estate projects, where demand for construction steel is likely to pick up. While seasonal recovery in demand is anticipated, downstream funding remains limited, meaning the actual release of purchasing power may fall short of expectations. This could result in slower-than-expected inventory destocking, potentially weakening the upward momentum for steel prices. On the supply side, although some steelmakers are operating at margins close to breakeven—or even slightly below—incurring losses—they haven’t yet turned fully unprofitable. As a result, their willingness to cut production remains low, with national steel plants continuing to maintain relatively high output levels. Consequently, supply pressure on the market remains significant. Meanwhile, independent electric arc furnace operators are grappling with substantial cost pressures amid ongoing profit losses, keeping rebar production at subdued levels. Overall, it’s expected that steel supply will remain relatively robust this week, while demand continues to ease gradually. As a result, inventory accumulation is likely to slow down—but whether this will translate into a smooth reduction of stockpiles remains uncertain. Currently, market participants are adopting a cautious stance toward steel price trends, with many opting to wait and see. This lack of active trading could dampen price rallies, making it challenging for steel prices to surge significantly higher. Meanwhile, key raw materials such as iron ore and coking coal continue to trade at elevated levels, providing strong cost support for steel producers amid mounting production costs. Under these circumstances, steel mills face tight profit margins, leaving them with limited room to lower prices. In summary, despite cost-side support, the absence of robust macroeconomic drivers and the risk that demand recovery may fail to meet expectations suggest that the steel market is likely to remain range-bound this week, with a slight bias toward weakness. Downside downside risks appear limited, but upward momentum may struggle to gain traction. Looking ahead, focus should be placed on the 3125 resistance level above, while potential rebound opportunities could emerge near the 3000–3050 support zone below.

Han Weidong of Youfa Group: Last Friday night, the VIX—the fear gauge—surged sharply, while gold continued its upward momentum. Meanwhile, U.S. stocks, Bitcoin, and commodities all plunged, sparking widespread panic across markets. Steel prices remain at historically low levels, still more than 100 points above their previous trough. Although prices in the steel industry aren’t particularly high right now, the underlying contradiction is profound: production remains excessively high, yet demand remains stubbornly weak. In this environment, price stability isn’t the industry’s safeguard—only cutting output can truly protect it. As such, we must maintain a steady, disciplined approach and patiently await the inevitable reduction in steel production. Without that crucial step, there’s simply no room for alternative strategies. Currently, while keeping a close eye on fundamental market dynamics, we must also remain vigilant against systemic risks. The window of opportunity to address these challenges lies squarely in mid-November. And as we face the looming threats of "black swan" events and "gray rhinos," market fundamentals should take a backseat—for now. As we enter the fourth quarter, our top priority must be to firmly defend the gains achieved over the first three quarters. Success demands meticulous attention to detail, because while making profits today feels like paddling upstream against a powerful current, losing money can happen in an instant.