Experts say the city—November 24

My Steel: On the supply side, last Friday, the five major steel products totaled 8.4991 million tons, an increase of 155,300 tons from the previous week—representing a 1.9% rise. Steel production this period saw a notable uptick, particularly in rebar output. Meanwhile, total steel inventories for the five major products stood at 14.331 million tons last week, dropping by 442,500 tons compared to the prior week—a decline of 3%. Overall, inventories of the five key steel varieties decreased, with building materials and plate products experiencing consistent inventory reductions. Specifically, building materials inventories fell by 324,100 tons, while plate inventories declined by 118,400 tons. On the consumption front, weekly demand for the five major steel products reached 8.9416 million tons last week, with building materials consumption up 5.3% week-on-week and plate consumption rising by 3.2%. Notably, among the five major product categories, the consumption patterns for building materials and plates remained aligned. As the off-season deepens, there is limited room for further improvement in demand for threaded steel and hot-rolled coils. With seasonal weakening in downstream demand ahead, steel inventory pressure may continue to build. On the threaded steel front, although steel mills are currently operating at a loss, some have already resumed production, leading to a gradual increase in short-term supply pressures. Meanwhile, a seasonal mismatch between supply and demand is becoming evident. In terms of consumption, low-price speculative activities have picked up somewhat, but given the typical seasonal trends, we expect consumer demand to gradually decline in the coming period. As for hot-rolled coils, inventories are expected to continue declining slightly this week, albeit at a slower pace. Overall, while the fundamental supply-demand dynamics haven’t yet shown significant imbalances, current production levels remain stubbornly high. Once demand weakens further during the off-season, inventory pressures will likely intensify.

Steel Home: Last week, domestic steel prices remained relatively strong, driven by improvements in both the capital market and broader market sentiment toward black commodities. However, the underlying market condition of weak supply and demand has yet to change. First, blast furnace and electric furnace utilization rates remain high, reflecting continued production enthusiasm among steelmakers—output levels have not softened significantly. Second, with the onset of the traditionally slower consumption season, market participants remain cautious overall, leading to subdued trading volumes across major steel product categories. Third, October saw a month-on-month and year-on-year decline in steel exports, particularly for hot-rolled coil products, with exports falling by more than 5 million tons in the first ten months of the year. On the positive side, steel costs continue to provide solid support, while steel inventories have been steadily declining recently, suggesting a potential shift toward a balanced or slightly tight supply-demand equilibrium. Additionally, most steel mills are already operating at a loss based on current cost structures, raising expectations of further production cuts in the near term. Overall, domestic steel prices are expected to fluctuate and adjust this week, moving within a narrow range.

Lange: The current international environment remains complex and challenging, marked by numerous factors of instability and uncertainty. Domestically, cyclical and structural contradictions are intertwined, posing ongoing challenges to economic performance. Despite this, China continues to be the world's largest developing country. Looking ahead, there is still vast room for investment as our nation strives to reach the level of a moderately developed nation. From an industrial development perspective, strengthening the foundation of the real economy, fostering the integrated growth of technological and industrial innovation, accelerating the cultivation and expansion of new-quality productivity, and promoting the transformation and upgrading of traditional industries all require sustained increases in investment. Looking at the black commodity futures market, prices of black commodities showed mixed movements: coking coal, the main contract, fell by 1.82%, remaining the biggest loser; other varieties experienced only minor declines, while threaded steel managed to eke out a slight gain. In the short term, signal-driven price movements remain unclear, though the market bottom has edged slightly higher. Traders should continue monitoring price dynamics near the 3050–3060 mark, staying vigilant against potential further small-scale pullbacks. The intraday reference trading range is expected to be 3051–3070. From the perspective of the spot steel market: On the supply side, influenced by profit margins across different steel products, steelmakers have gradually increased their capacity utilization—from weak to stronger—and iron ore production has seen a modest uptick, accompanied by rising output in specific steel varieties. Meanwhile, on the demand side, as the traditional off-season effects deepen and outdoor construction activities become increasingly restricted, end-user demand has weakened, leading to mixed performance in market transactions. On the cost front, although iron ore prices edged up slightly, scrap steel prices remained stable yet declined, while coking coal prices surged significantly. This combination of factors has helped sustain robust production costs. Given these dynamics—such as overlapping economic structural challenges, deepening off-season impacts, shifting supply conditions, uneven market activity, and resilient cost support—the Lange Steel Research Center anticipates that China’s domestic steel market will likely experience a mild downward trend this week.

Tang and Song Dynasties: This week, we’ve officially entered winter, and demand in northern regions has weakened seasonally due to cooling temperatures. As temperatures continue to drop, outdoor construction activities—such as building projects—will face increasing restrictions, further reducing steel demand. In particular, the demand for construction steel in northern areas is expected to keep declining. Meanwhile, construction sites in southern regions are ramping up efforts to meet tight deadlines, resulting in relatively resilient demand. Despite broader economic headwinds, infrastructure projects and real estate developments in the south remain active, providing some support for steel consumption. As a result, steel demand in southern regions is forecasted to stay stable this week, though growth prospects remain limited. Overall, steel demand is showing a divergent trend: while northern regions experience weakening demand, southern areas maintain steady levels, leading to an overall market condition that’s likely to remain stable but tilted slightly weaker. Under these circumstances, the steel market will continue to grapple with insufficient demand. However, regional disparities will cause uneven performance across different segments. On the supply side, despite ongoing steel production losses, blast furnace operations at major steelmakers have remained largely stable, with no signs of widespread, proactive maintenance or shutdowns. Consequently, blast furnace utilization rates are expected to hold steady this week. Meanwhile, independent electric arc furnaces are still operating at low profit margins, keeping rebar output at subdued levels. In terms of inventory, the market continues to slowly digest its stockpile amid weak supply and demand conditions. Inventory levels are projected to decline modestly again this week, though the pace of reduction may slow further. Taken together, the steel market is navigating a delicate balance: supply remains relatively stable, demand stays stubbornly weak, and inventories continue their gradual decline. While cost pressures provide some floor support, overall market sentiment remains cautious. Factors like steel industry losses, diverging demand patterns, and broader economic downturns have left market participants cautiously optimistic about steel prices. Looking ahead, the steel market is likely to trade in a range-bound, predominantly bearish pattern. For rebar futures, focus should be placed on the resistance level around 3080 on the upside, while support is expected near 3000 on the downside.

Han Weidong of Youfa Group: Recently, financial markets and commodity prices have experienced significant volatility, while steel and iron ore have remained relatively stable. However, the fundamentals of the steel industry are cause for concern: blast furnace utilization rates and electric furnace operation levels are both higher than in the past three years, and inventory levels are also at their highest point in the same period. Meanwhile, demand has declined sharply year-on-year for four consecutive months. As a result, most steel companies are already operating at a loss. With the onset of the off-season, the imbalance between supply and demand is starting to surface. Historically, winter stockpiling in the steel industry has consistently led to losses, and no company has proactively chosen to increase its inventories—indicating that steelmakers will eventually be forced to cut production. This is undoubtedly a challenging period ahead. A well-known domestic steel industry website recently used advanced system algorithms to forecast that market conditions won’t stabilize until January of next year. For now, the best strategy remains prudent management: carefully matching production with sales volumes, maintaining healthy current-period profit margins, and ensuring a successful conclusion to this year’s business operations!