Experts say the city—November 17

My Steel: On the supply side, last week the total supply of the five major steel products reached 8.3438 million tons, a decrease of 223,600 tons—or 2.6%—compared to the previous week. This weekly decline was primarily driven by long-products, as demand for construction materials entered its off-season, leading to a sharper drop in demand compared to flat products. Additionally, spot market liquidity for long products remained weaker than that of flat products. Last week, the total inventory of the five major steel products stood at 14.7734 million tons, down 262,300 tons—or 1.7%—from the prior week. Notably, the overall inventory of these five product categories continued to decline, with the rate of decline accelerating compared to the previous week. Looking at inventory dynamics, both factory and social inventories of the five major steel products saw wider declines compared to the previous week, largely due to reduced production levels. On the consumption front, last week the apparent weekly consumption of the five major steel products totaled 8.6060 million tons, representing a slight decrease of 0.7% from the prior week. Specifically, consumption of construction materials fell by 1.3%, while flat-rolled product consumption declined by 0.4%. With the off-season fully underway, coupled with weaker downstream construction activity and delayed year-end payments, long-product consumption faced significant headwinds, resulting in a steeper decline compared to flat-rolled products. Overall, both supply and demand for the five major steel products contracted last week, while total inventory levels continued to fall—at an accelerated pace compared to the previous week. This suggests a neutral-to-slightly bearish market backdrop, with no immediate contradictions in the underlying fundamentals. From a supply perspective, current spot-market profit margins for steel remain under pressure, reinforcing the ongoing downward trend in production. However, given that steel inventories are still declining steadily in the short term, the pace of production cuts may begin to ease marginally. On the demand side, as the off-season deepens further, consumption of construction materials is expected to weaken even more. Meanwhile, flat-rolled products may face some pressure in the fourth quarter as the impact of two recent policy measures continues to wane. In terms of inventory trends, with both supply and demand projected to remain subdued, steel inventories are likely to continue shrinking in the near term. That said, the rate of decline could moderate somewhat in the months ahead. Overall, as the off-season intensifies, upward pressure on steel market fundamentals is set to strengthen gradually. Given the current macroeconomic environment—a period often characterized by uncertainty—market dynamics will remain firmly anchored in the industrial sector. Considering the ongoing divergence between supply and demand, the negative feedback loop is expected to persist in the short term, keeping steel prices biased toward a weaker trajectory.

Steel Home: Currently, the domestic steel market is generally characterized by weak supply and demand, coupled with a policy vacuum, resulting in little overall movement in steel prices. First, although crude steel and finished steel production declined—by 12.1% and 0.9%, respectively—in October, the trend aligns more closely with the observed decline in steel plant utilization rates tracked by SteelHome. Second, construction-related steel products have already entered the traditional off-season for consumption, while industrial materials are seeing weaker demand following the peak period of trade-in programs in sectors like automotive and home appliances. As a result, key economic indicators such as investment, consumption, and industrial output all experienced a noticeable downturn in October. Third, current steel inventories remain relatively high, particularly for plate products, with the increase primarily driven by steel mills themselves. Meanwhile, distributors and downstream buyers are adopting a cautious approach to procurement. Fourth, achieving this year's full-year economic growth target is expected to be manageable, meaning there’s unlikely to be any short-term stimulus policies or surges in construction activity. On the positive side, coal and coke markets are performing strongly, making it increasingly probable that the fourth round of coke price hikes will take effect. Additionally, both the CPI and PPI have rebounded month-on-month, signaling that the effects of the accommodative monetary policy are gradually becoming more evident. Overall, domestic steel prices are anticipated to undergo only minor adjustments this week.

Lange: Currently, the national economy is operating steadily overall, with transformation and upgrading progressing smoothly, and new growth drivers continuing to strengthen. However, we must also recognize that the external environment remains unstable, with numerous uncertainties, while domestic structural adjustments face significant pressure, posing considerable challenges to maintaining steady economic performance. Looking ahead, we must adhere to the overarching principle of pursuing progress while ensuring stability, comprehensively boosting domestic demand, and making concerted efforts to stabilize employment, businesses, markets, and expectations. At the same time, we should actively push for the continued effective implementation and enhancement of macroeconomic policies, deepen reform and opening-up across the board, further reinforce innovation-driven development, and promote both qualitative improvements in economic performance and reasonable quantitative growth. From the perspective of black-series futures, last week the main rebar contract (01) closed at 3,053 yuan, up 13 points from the previous day—but only 19 points higher than Friday’s close. Meanwhile, the weekly settlement price stood at 3,039 yuan, down 10 points compared to the prior week, indicating that prices remained largely unchanged over the past week, with a rather choppy and uncertain trend. Latest open interest totaled 1.837 million contracts, marking a reduction of 124,000 contracts. Although there was a short-term rebound recently, the weekly chart has yet to break through key resistance levels, leaving the overall downtrend intact. Therefore, unless prices manage to climb above 3,080 yuan this week, sustained upward momentum will remain elusive, underscoring the need to carefully manage market timing. Turning to the spot steel market: On the supply side, influenced by profit margins across different product categories, steelmakers have continued to ease their capacity expansion efforts, leading to a slight decline in molten iron production and reduced output of specific steel products. On the demand side, although the traditional off-season has officially begun, some regions are still witnessing accelerated construction activities, helping terminal demand maintain a degree of resilience, albeit with modest gains in market transactions. Meanwhile, on the cost front, despite minor fluctuations in iron ore prices, scrap steel prices have edged downward amid stable conditions, while coking coal prices have remained steady. These factors collectively ensure that production costs continue to provide solid support. Based on these dynamics—combined with the ongoing momentum of economic transformation, resilient off-season demand, slowing supply growth, moderate increases in market activity, and robust cost support—the Lange Steel Research Center anticipates that China’s steel market will likely continue its weak and volatile trading pattern this week.

Tang and Song Dynasties: This week, cold air will affect most regions across China, bringing precipitation to parts of the South, while some areas in the North will experience both rain and a drop in temperatures. These weather conditions are increasingly impacting construction project activities, causing demand for construction steel to enter a seasonally weaker phase. As major policies enter a lull following their recent release, the supportive influence of macroeconomic measures on market dynamics is waning. Consequently, sentiment in the domestic black commodity futures market remains cautious and tentative, with speculative trading and trade-related demand unlikely to pick up significantly. Overall, steel demand continues to stay relatively weak but stable. On the supply side, steel producers are facing widening losses, prompting more companies to schedule maintenance activities. Meanwhile, environmental regulations remain stringent in regions like Tangshan, leading to continued production restrictions. In South China, some areas have even implemented additional output controls. At the same time, independent electric arc furnace operators are suffering from deepening profit losses, keeping rebar production levels persistently low as businesses grapple with mounting cost pressures. As a result, supply is expected to decline slightly this week. In terms of costs, major coking coal producers are signaling plans to raise prices for the fourth consecutive round, which should continue to provide some support for steel prices. From a global perspective, the U.S. government has ended its "shutdown" after President Trump signed the temporary appropriations bill, while the Federal Reserve announced another significant personnel change, further boosting expectations of a rate cut in December. Domestically, October’s economic activity data indicate that China’s economic growth momentum has begun to weaken as we move into the fourth quarter. This, coupled with the diminishing role of macroeconomic policies in bolstering market conditions, suggests that the overall market environment is losing its upward drive. Under these circumstances, steel supply will likely continue to ease slightly this week, while demand remains steady yet subdued. Inventory levels are also expected to decline modestly, keeping supply and demand in a fragile balance. Although negative feedback loops haven’t fully kicked in yet, steel prices are already at relatively low levels. With the U.S. government’s resolution of the shutdown providing a minor boost to the international macroeconomic outlook, domestic economic growth momentum continues to weaken. As a result, the fundamental outlook points toward a gradual marginal deterioration, leaving the market lacking strong upward momentum. Market rallies are thus expected to remain limited, and steel prices are likely to fluctuate within a broadly bearish range in the near term. In the short term, focus should be placed on the 3060 resistance level—ideally, prices shouldn’t rise above 3090. For now, traders are advised to adopt a cautiously bearish stance, watching closely for support around 3020; if this level is breached, prices could retreat further toward 2960.

Han Weidong of Youfa Group: This weekend, many old friends from across the country gathered at Beijing Jiuhua Mountain Villa to attend the annual conference of Lange Steel Network—a grand event drawing nearly 3,000 attendees, all brimming with optimistic expectations for next year in the steel industry. Today, leaders from the China Iron and Steel Association unveiled some sobering statistics: from January to September, the nation’s apparent demand for crude steel dropped by 5.7%, a figure that certainly came as a shock. At the same time, social steel inventories have already surpassed the levels seen during the past three-year cycle. Cai Jin, Chairman of the China Federation of Logistics & Purchasing, emphasized the importance of strengthening supply chains. Meanwhile, economist Ma Guangyuan urged everyone to "respect economic cycles" and "learn to let go of the past." He also predicted that the real estate market won’t hit its bottom until well into next year, adding that domestic economic challenges next year will likely mirror this year’s difficulties—underscoring the need for policymakers to ramp up support measures. Economist Li Daokui, meanwhile, highlighted that China’s domestic demand indicators remain alarmingly weak, noting that nominal GDP in the third quarter hit a new low—second only to the pandemic era—calling for even more aggressive policy interventions. Looking ahead, Langge Steel Network’s Ma Li forecasts that average steel prices next year will be about 100 yuan lower than this year’s levels, potentially pushing next year’s average price even further below current levels. All in all, participants seem cautiously optimistic about next year’s prospects. Turning to the current market situation, steel mills in Tangshan are now operating at zero or negative profit margins across most product categories. As inspection activities intensify, it’s widely expected that these mills may soon follow the “slope down, donkey off” approach—gradually scaling back production. Meanwhile, steel prices are hovering just under 100 yuan above their recent lows. If prices stabilize at this level while mills continue cutting output, the market could finally find a solid floor and begin to recover.