Experts say the city—November 3

My Steel: On the supply side, last Friday, the supply of China's five major steel products reached 8.7529 million tons, an increase of 99,700 tons from the previous week—representing a 1.2% rise. Steel production this period showed a slight uptick, with rebar output experiencing the most notable growth. Meanwhile, total steel inventories for the five major products stood at 15.1374 million tons last week, dropping by 411,300 tons compared to the prior week—a decline of 2.6%. Inventories of all five key steel categories fell across the board, with building materials and plate products following a similar trend: building materials saw a destocking of 288,700 tons, while plate products experienced a sharper decline of 455,300 tons. On the consumption front, weekly demand for the five major steel products totaled 9.1642 million tons last week, with building materials consumption up 5.1% week-on-week and plate product consumption rising by 1.3%. Notably, the consumption patterns for building materials and plates remained consistent throughout the week. Currently, the traditional peak season for steel demand is nearing its end. For rebar and hot-rolled coil, apparent demand may have already peaked, and as seasonal demand weakens in the coming months, steel inventories could face further upward pressure. In terms of rebar specifically, steel mills are already operating at historically low production levels, and there’s limited incentive for further cuts in output. As such, short-term production is expected to remain relatively stable. On the consumption side, last week’s demand likely marked the highest point of fourth-quarter consumption. Given the typical seasonal nature of steel demand, we anticipate a gradual slowdown in consumption moving forward. For hot-rolled coil, weekly production is forecasted to stay steady at current levels, though mill inventories may see a modest build-up. Meanwhile, apparent demand for this product has also peaked and is now trending downward. Meanwhile, macroeconomic uncertainties are gradually easing, suggesting that future price movements in the black commodity markets may once again be driven primarily by underlying market fundamentals rather than speculative factors.

Steel Home: Last week, steel market prices generally rose, primarily driven by the easing of China-U.S. economic and trade tensions, which boosted market sentiment. In particular, the recent summit between the leaders of China and the U.S. in South Korea further energized investor confidence. Additionally, the Ministry of Commerce announced positive outcomes from bilateral talks, including the removal of the 10% tariff on fentanyl, a one-year suspension of the planned 24% retaliatory tariff, a temporary reprieve from the U.S. export controls' "50% penetration rule" for another year, and a one-year delay in the Section 301 maritime-related investigation. These developments are beneficial for both China and the U.S., as well as the global economy, helping to reduce uncertainty over the coming year. From a supply-and-demand perspective, current high production levels remain largely unchanged, while downstream demand is set to enter its seasonal lull. As a result, structural imbalances between supply and demand are likely to become more pronounced. On the cost side, coking coal producers have initiated a third round of price hikes, while iron ore prices have also climbed broadly, strengthening cost support across the industry. Looking ahead, domestic steel market prices this week are expected to initially rise before eventually declining, fluctuating amid ongoing volatility.

Lange: Currently, the contraction in demand driven by the domestic market continues to deepen, exacerbating the macroeconomic imbalance where overall supply exceeds demand. Insufficient demand is increasingly constraining corporate production and investment, further intensifying downward economic pressures. To address this, it is crucial to significantly strengthen counter-cyclical macroeconomic policy adjustments and substantially boost government investment in public goods, effectively expanding aggregate demand, boosting enterprise order volumes, and swiftly revitalizing business production and investment. This will help consolidate and reinforce China's positive economic recovery momentum as policies continue to deliver tangible results. Looking at the black commodity futures markets, the entire sector has turned weaker, with most contracts closing lower during the day. Among them, the main coking coal contract fell 1.11%, settling at 1,777 yuan, while other varieties experienced smaller declines. Meanwhile, the rebar main 01 contract closed at 3,106 yuan, down 15 points from the previous day—but up 60 points compared to last Friday’s close. The weekly settlement price stood at 3,104 yuan, a gain of 58 points over the prior week. Latest open interest totaled 1.879 million contracts, marking a sharp decline of 172,000 lots from last Friday. Both long and short positions have shown waning interest, with substantial capital outflows evident. On the weekly chart, prices have yet to break higher; instead, daily price movements have oscillated between rebounding and retracing, currently facing resistance around the 3,143 level. For now, prices remain above the 3,100 mark at the close of trading, though the short-term downward trend hasn’t fully run its course. Traders should remain cautious about the possibility of further retreat below this key support level. This week, the expected trading range is projected to be between 3,050 and 3,160 yuan. In the spot steel market, on the supply side,钢厂 capacity release has shifted from robust to subdued due to varying profit margins across product categories, leading to a slight drop in molten iron output. However, individual product outputs have shown mixed performance. On the demand side, external factors such as the recent interest rate cut cycle and the easing of U.S.-China tensions have spurred significant rallies in both futures and spot markets, fueling heightened speculative activity and boosting overall market turnover. Meanwhile, on the cost front, steady yet rising iron ore prices, coupled with modest increases in scrap steel costs and a sharp surge in coking coal prices, have kept production costs resilient. Given these dynamics—namely, weak effective domestic demand, the transition from peak to off-season demand, a shift in supply conditions from strong to moderate, rising market turnover, and persistent cost support—Lange Steel Research Center anticipates that China’s domestic steel market may experience volatile downward pressure this week.

Tang and Song Dynasties: This week, as the weather turns cooler, downstream construction activities have picked up pace, leading to a slight yet further rebound in end-user demand—particularly in sectors like infrastructure development and real estate. The accelerated pace of construction will provide some support for steel demand. However, as the market enters November, the traditional peak season gradually gives way to the off-season, causing speculative demand to weaken and market sentiment to turn more cautious. Overall, despite the resilience underpinned by solid demand, seasonal factors are likely to dampen market activity and price flexibility. On the supply side, production restrictions in Tangshan have ended, but some regional steelmakers are now facing deeper losses, prompting them to schedule maintenance. As a result, steel supply is expected to see a modest recovery—but the extent of this rebound may remain limited. Meanwhile, independent electric arc furnace mills continue to operate at low profit margins, with rebar production staying subdued as companies grapple with significant cost pressures. From a cost perspective, the supply of coking coal remains tight, a situation unlikely to ease substantially in the near term. This ongoing supply crunch has already triggered three rounds of price hikes in the coking coal market. Consequently, the raw materials market—especially the dual-coke segment—will continue to provide strong support for steel prices. In terms of the broader macroeconomic environment, China and the U.S. are set to maintain dialogue and communication, suggesting that improvements in their economic and trade relations could persist over time. Such a positive trend is expected to bolster market confidence and sustain upward momentum. All in all, while the steel market will likely retain its resilience this week, supported by robust demand, both market activity and price elasticity are poised to decline as seasonal factors take hold. Steel supply is anticipated to recover slightly, while demand continues to strengthen, driving another modest drop in steel inventories. Meanwhile, solid cost support and an improving macro backdrop will continue to underpin steel prices, though expectations of weakening demand and hedging pressures in the futures market will cap upside potential. Overall, steel prices are expected to fluctuate within a narrow range at elevated levels, with key resistance at 3180 and support around 3070.

Han Weidong of Youfa Group: Already November has arrived, and the first major macroeconomic data point is the PMI reading of 49, which declined from the previous month. Combined with data on fixed-asset investment and the drop in steel demand during August, September, and October, future demand doesn’t look promising. In fact, we expect November’s demand to fall by more than 5% year-on-year. Currently, iron ore prices remain at this year’s high levels, while global shipments are also staying elevated. Meanwhile, today the NDRC announced measures to ensure stable coal supplies, which will likely weaken cost support for the industry. From a fundamental perspective, the market should shift toward production cuts in the coming months—so let’s stay patient and watch closely! At the Steel Home Annual Conference, Chairman Wu Wenzhang predicted that next year’s average steel price will rise by 100 yuan compared to this year. Yet right now, the price of Tangshan strip steel is already hovering near this year’s average—making it virtually impossible to hold inventory due to such tight margins. In November, there’s just one major macro event to keep an eye on: the U.S. Supreme Court’s ruling on Trump’s tariff case. This could turn into a massive market disruption, throwing the entire landscape into uncertainty. But here’s the key takeaway: downturns aren’t risks—they’re opportunities. On the flip side, rallies might actually hinder the industry’s ability to cut production, ultimately weighing down next year’s market conditions. After all, only when prices remain low can we truly seize real opportunities. And remember, only through sustained production cuts can we pave the way for higher future prices—and ultimately, improved profitability for steelmakers.