Experts say city—March 9

My Steel: On the supply side, last Friday, the supply of the five major steel products reached 7.9724 million tons, an increase of 47,000 tons from the previous week. In this period, the product mix of steel production showed some differentiation: rebar and wire rod production increased significantly, while hot-rolled steel production declined somewhat. Last Friday, the total inventory of the five major steel products stood at 19.52 million tons, up 10.589 million tons from the previous week—a rise of 5.7%. The total inventories of the five major product categories rebounded last week, with building materials and sheet products showing consistent inventory trends. Both building materials and sheets experienced inventory buildups: building materials accumulated by 8.976 million tons, and sheet products by 1.613 million tons. On the consumption side, last week the weekly consumption of the five major product categories totaled 6.335 million tons, with building materials consumption rising by 90.8% from the previous week and sheet products consumption increasing by 0.3%. Among the five major product categories, the consumption patterns for building materials and sheets remained consistent. At this stage, we have not yet entered the critical period for verifying strong seasonal demand for steel. Hence, the primary factors influencing short-term fluctuations in steel prices remain geopolitical disruptions and the unfolding of expectations surrounding the Two Sessions. From an industry perspective, there is still room for further increases in the output of the five major steel products, which means the turning point for destocking finished products will be delayed. As a result, the supply-demand imbalance in the black metals sector continues to accumulate. We expect that, given the currently low valuation, short-term black metal prices—under the influence of macroeconomic short-term disturbances—will still have some room for modest upward movement. Meanwhile, raw material price increases are outpacing those of finished products, leading to a slight compression of steel mill profits.

Steel Home: Last week, domestic steel prices remained stable with slight fluctuations. Downstream demand gradually picked up, and electric furnace enterprises resumed production at an increasing pace, keeping the market in a weakly balanced state. On the supply side, steel mills continued to ramp up production; crude steel output rose month-on-month but remained below the level of the same period last year. From January to February, the ten-day average output of key steel companies showed an overall month-on-month increase, yet all remained lower than the corresponding period last year. Combined with blast furnace utilization rates and electric furnace operating rates, it is highly likely that crude steel production in the first quarter and March will fall short of the previous year’s levels. In terms of downstream demand, since the beginning of this year, investment in new construction projects across various regions has been lower than in the same period last year. The automotive and home appliance sectors have been significantly affected by trade-in programs, leading to a gradual recovery in demand, though overall demand remains relatively weak. On the macro policy front, the government work report forecasts this year’s economic growth at 4.5%–5%, down from around 5% last year. Coupled with a decline in steel intensity per unit of GDP, the weak balance between supply and demand is expected to become a long-term trend for the steel market. Regarding inventory changes, in the second week after the holiday, the growth rate of steel inventories slowed down. Compared with the same period over the past five years, inventories were higher than last year but lower than in previous years. From a structural perspective, plate inventories remain high, and construction steel inventories saw a significant increase, both of which will put downward pressure on inventories in the coming period. As for steel costs, iron ore prices rose sharply last week, while the first round of coking coal price cuts took effect; overall, cost changes remained relatively stable. Overall, neither upward nor downward momentum in the steel market has been strong recently, and domestic steel prices are expected to continue fluctuating slightly this week. Particular attention should be paid to the impact of the Middle East conflict on commodities and black commodity futures.

Lange: China’s macro policies are being intensively implemented, firmly anchoring the direction of economic development for 2026. The central bank is adopting precise measures to maintain ample liquidity, while fiscal and monetary policies are working in synergy to step up efforts. The Government Work Report clearly sets the annual economic growth target at 4.5%–5%, with the government striving for even better outcomes in practice and establishing a more proactive fiscal policy combined with a moderately accommodative monetary policy stance. With the release of the draft outline for the 15th Five-Year Plan, macroeconomic regulation is comprehensively focused on stabilizing growth, promoting structural transformation, and anchoring market expectations. According to Lange’s spot-and-futures intelligent analysis data, black commodity prices generally closed higher, with the main contracts for coking coal, coke, and iron ore all rising by over 1%. These gains outperformed those of rebar and hot-rolled coil, which saw relatively smaller increases. The main rebar contract, May delivery, closed at 3,088 yuan per ton, up 8 points from the previous day and 11 points from last Friday’s closing price. Its weekly settlement price was 3,074 yuan per ton, up 22 points from the previous week. Latest open interest stood at 1.798 million contracts, with intraday reductions of 38,000 contracts—down 150,000 contracts from last Friday. Continued decline in open interest has limited the rebound strength of the market. Currently, the weekly chart shows the second consecutive week of rebound, and the daily chart has effectively broken above the 3,080-yuan mark. The next step could see further attempts to challenge the 3,100-yuan level, with potential upward movement back into the 3,110–3,120-yuan range. According to Lange’s steel intelligence data, on the supply side: affected by profit margins across different product categories and production restrictions in some regions, steel mills’ capacity utilization has shifted from strong to weaker, leading to a slight reduction in molten iron output, though output of specific products continues to rise while others decline. On the demand side: as the market just reopened after the Lantern Festival, trading activity is gradually shifting from a stagnant phase to a recovery phase. On the cost side: although iron ore prices have risen slightly, scrap steel prices have experienced minor fluctuations, and coking coal prices remain stable, resulting in a continued weakening of cost support. Therefore, Lange’s steel intelligence forecasts that, under the influence of a clear economic growth target, intensive macro policy implementation, the central bank’s maintenance of ample liquidity, a shift from strong to weak supply release, gradual recovery in end-demand, and ongoing weakening of cost support, this week’s domestic steel market is likely to experience volatile and weakening trends.

Tang and Song: This week, the market has entered an observation period, with supply recovery pressures and demand recovery being closely scrutinized. Policy measures from the Two Sessions and rising energy costs are providing support, while also constraining price fluctuations within a narrow range. On the supply side, there’s a slight upward trend. During this week’s Two Sessions, Tangshan blast furnaces continued to operate at reduced capacity; as the mid-to-late stages of the meetings draw to a close, furnace utilization rates are expected to rise. Electric arc furnace steel mills continue to resume production, leaving room for further increases in rebar output, thus boosting overall steel supply. On the demand side, end-user demand is showing some signs of recovery. As temperatures gradually warm up and resumption of work progresses steadily, the real estate market continues to struggle with persistently weak new construction starts. Downstream buyers are primarily purchasing based on immediate needs, and given the tense international situation, traders remain highly risk-averse, resulting in subdued willingness to proactively stockpile or speculate on inventory. In terms of inventories, with steel mill output rising and demand recovery remaining limited, total steel inventories may once again begin to accumulate, though the pace of accumulation is expected to slow down. Social inventories continue to rise, while mill inventories remain stable or decline slightly. On the cost side, raw material prices have begun to ease following the first round of price cuts by steel mills, leading to a downward shift in coking coal prices. The iron ore market is experiencing seasonal replenishment as production restrictions come to an end; meanwhile, higher freight rates and oil prices driven by external geopolitical tensions are providing temporary cost support for prices. At the macro level, both the implementation of Two Sessions policies and rising energy costs triggered by the global situation are offering support to the market. However, constrained by ongoing supply recovery pressures and high steel inventories, the market lacks sufficient upward momentum. This week, we expect major steel product prices to fluctuate and adjust within a narrow range. While Two Sessions policies and rising energy costs provide support for steel prices, supply recovery pressures and high inventories limit the room for further gains. Prices are likely to find bottom support but lack strong upward drive. Imported ore prices are expected to remain volatile but tend toward the stronger side; coking coal prices may stabilize after initial declines. For rebar futures, watch closely for support around 3,000–3,030 yuan/ton and resistance around 3,120–3,150 yuan/ton. Key factors to monitor this week include the implementation of Two Sessions policies, developments in the Strait of Hormuz situation, and U.S. non-farm payroll data.

Han Weidong: As production and business activities gradually return to normal, the fundamental market conditions for this spring have become clear: demand continues to decline, production levels (and capacity utilization rates) remain lower than last year, inventory data are neutral, and steel prices remain at low levels. With the release of the government work report, this year’s economic outlook has also become fully apparent—entirely in line with market expectations. As the war unfolds, it’s highly likely that the situation will enter a protracted stalemate; the key observation now is when traffic through the Strait of Hormuz can partially resume. The negative impact of the war on global economic growth and the resulting rise in inflation are already confirmed—it’s only a matter of degree. The imbalance between supply and demand in the steel industry will intensify, primarily due to the sustained 5% or so decline in demand from August last year through March this year. However, starting from May onward, investment is expected to turn positive, driving demand growth year-on-year and sustaining this trend through year-end. Today, the steel market as a whole is experiencing volatile trading—lower lows followed by higher highs. The second half of the year will significantly outperform the first half, benefiting from improved demand, an end to internal competition, and the inflationary pressures driven by the war. Meanwhile, the first half of the year benefited from steel prices being at their lowest point and relatively low risk. Therefore, our strategy for the first half of this year is to operate prudently and patiently weather the storm—the light at the end of the tunnel is already in sight!