Experts say city—March 30

My Steel: On the supply side, last week’s output of the five major steel product categories totaled 8.3958 million tonnes, unchanged from the previous week. This period saw a divergence in the product mix: rebar and medium-to-thick plate production declined, while wire rod and hot-rolled coil output increased. Total inventories of the five major steel products stood at 18.9784 million tonnes, down 483,900 tonnes from the prior week, a decline of 2.5%. Inventories of all five product categories fell, with building materials and flat products showing consistent destocking trends—building materials down 358,200 tonnes and flat products down 125,700 tonnes. On the demand side, weekly consumption of the five major steel products reached 8.8797 million tonnes, with building-materials consumption up 8.4% month-on-month and flat-product consumption down 0.9% month-on-month. Among the five major categories, consumption patterns for building materials and flat products diverged. Both rebar and hot-rolled coil are now entering the peak-season validation phase; however, given the limited elasticity in current consumption, supply pressure on rebar is lighter than that on hot-rolled coil. Steel pricing remains anchored in the raw-materials segment, supported by expectations of coal-for-coke substitution and by elevated seaborne iron-ore freight costs, which provide strong floor support for steel prices. From a fundamental perspective, mill profitability remains adequate, suggesting that hot-rolled-coil output could still rise further this week. In the near term, the black-steel sector is likely to continue rising, accumulating supply–demand imbalances; attention should be paid to the pressure that a rebound in output may exert on the pace of inventory destocking.

Steel Home: Last week, domestic steel prices remained generally stable with a slight upward bias, as the market entered a phase of recovering demand and inventory destocking, resulting in an overall balance between supply and demand. On the supply side, blast-furnace and electric-arc-furnace utilization rates continued to inch up, while output at key steelmakers declined year on year, keeping overall steel production below the level of the same period last year and limiting supply-side pressure. Downstream demand has been steadily improving, with average weekly trading volumes for the main surveyed steel grades continuing to rise and now approaching normal levels, further supporting the ongoing inventory drawdown in the steel market. In terms of steel costs, iron-ore prices have pulled back after a sustained rally, while the first round of coking-coal price hikes has run into resistance but is likely to be implemented later; moreover, the steel industry posted modest losses in January–February, providing some support for steel costs. Externally, the U.S.–Israel–Iran conflict has eased, reducing its impact on the market, though uncertainties remain. We expect domestic steel prices to trade in a narrow range this week.

Lange: The global economy and markets are currently dominated by geopolitical tensions and macroeconomic policy decisions. Geopolitical instability in the Middle East persists, intensifying concerns about energy supply; meanwhile, the Federal Reserve has kept interest rates unchanged, pushing back expectations for rate cuts once again and heightening inflationary and growth pressures worldwide. Domestically, the economy is recovering steadily, with improving data on industrial production, consumption, investment, and exports, moderate price increases, continued implementation of pro-growth policies, and reasonably ample liquidity. Geopolitical disruptions have made energy and inflation anxieties the central variables, leading to a clear divergence in policy paces between China and other countries, as commodity markets trade under the dual influence of risk-aversion sentiment and underlying supply-and-demand fundamentals. On the supply side, driven by profit-and-loss dynamics across product categories, steel mills are further ramping up capacity release, resulting in higher hot-metal output and broad-based increases in output across all product segments. On the demand side, as weather continues to warm and work resumption accelerates nationwide, the recovery in end-user demand is showing pronounced regional disparities, with market transactions shifting from decline to growth. On the cost front, iron-ore prices have stabilized while trending lower, scrap-steel prices have softened, and coking-coal prices remain steady, weakening the support provided by production costs. Consequently, Lange Steel Intelligence forecasts that, amid a complex and uncertain geopolitical landscape, rising global inflationary pressure, steady domestic economic recovery, sustained pro-growth policy measures, stronger supply releases, uneven end-demand—with stronger demand in the south and weaker demand in the north—and waning cost support, the domestic steel market this week is likely to experience weak, choppy trading.

Tang and Song dynasties: This week, the market has entered the peak demand period of the “Silver Fourth” season, with supply remaining at high levels and little room for further increases. The extent of the seasonal recovery in demand is yet to be confirmed, while inventories have officially begun to decline. Cost support remains firm, but there is limited scope for raw-material price concessions. Coupled with ongoing geopolitical tensions in the Middle East that continue to disrupt energy and raw-material supplies, prices are likely to remain volatile as they adjust, with the conditions for a sustained downward trend still not yet ripe. On the supply side: blast-furnace utilization rates in the long-process sector remain stable at high levels, iron-ore output is approaching saturation, and the room for further increases in plate-product output—such as coil and strip—has narrowed markedly. In the rebar segment, independent electric-arc-furnace producers in southern China are operating at the margin of profitability, which constrains their production enthusiasm; short-process utilization rates are likely to stay broadly stable, with rebar output mainly fluctuating within narrow ranges. Overall, the supply landscape shows “plate products stabilizing at high levels while construction-materials lack elasticity,” leaving limited room for substantial output increases. On the demand side: this week marks the peak of the “Silver Fourth” demand season, with construction projects across both northern and southern regions entering full-scale execution and weather conditions improving, suggesting that nationwide rebar demand could strengthen. Processing and manufacturing firms are operating normally, and demand for plate and strip steel still has room to rise. While there is still potential for a recovery in “Silver Fourth” demand, with rigid demand increasing modestly, the market is gradually entering the traditional peak season. Although actual demand is constrained by weak new real-estate starts, the seasonal rebound trend is clear, providing solid support for prices. Regarding inventories: steel stocks have officially entered a downward trajectory, with inventory levels for all major product categories declining slightly, indicating continued improvement in the balance between supply and demand. Construction materials are benefiting from the onset of the peak-demand period, which should accelerate the pace of destocking; meanwhile, the inventory structure for plate products is being optimized, with resilient demand from the manufacturing sector helping to absorb excess stock. Although absolute inventory levels remain at seasonally high levels, the marginal trend of destocking has been confirmed, providing temporary support for prices. On the cost front: the complex and volatile situation in the Middle East continues to spill over, significantly increasing uncertainty in the global energy market. Domestically, raw-material prices—such as coking coal and iron ore—have moved higher under this influence, further strengthening the cost-support rationale. The coking-coal market, meanwhile, is characterized by a tug-of-war between supply and demand: loss pressures are prompting coking companies to raise prices proactively, while the recovery in demand also provides a basis for such hikes; many regional coking firms have already initiated the first round of price increases. However, steel mills’ willingness to absorb these hikes is limited, and macroeconomic sentiment is exerting downward pressure, so resistance to price increases remains considerable, leaving the market in a stalemate. At the macro level: this week will see a concentrated barrage of key events, which is expected to amplify volatility significantly. Developments in the geopolitical landscape, the release of China’s and U.S. PMI data, the publication of the Federal Reserve’s policy-meeting minutes, and the U.S. nonfarm-payrolls report will take turns unfolding, creating a dual stress test of policy and data. Among specific commodities, coking coal—as an alternative energy source—deserves close attention, as its relative strength is likely to persist. However, investors should be wary of the risk of a sharp pullback if geopolitical tensions ease, and guard against price corrections driven by shifts in market sentiment. Overall, the domestic steel market is expected to maintain a volatile, adjustment-driven trend this week, supported by the dual forces of rising costs and recovering demand, while constrained by elevated supply levels and high inventory pressure. The complex and ever-changing situation in the Middle East remains the core source of uncertainty, intensifying the pace of market volatility. From a technical perspective, the key support level for rebar futures lies around 3,110, while resistance is concentrated in the 3,200–3,260 range.

Han Weidong: In January–February, the steel industry posted a loss of RMB 2.47 billion, with an average loss of RMB 15 per ton of steel. Meanwhile, steel prices in January–March were more than RMB 100 lower on average than in the same period last year, and the failure to push prices higher is the primary reason for the losses. Demand in March was relatively strong, and steel output for the first quarter is expected to decline by about 6% year on year. Total social inventories are also at multi-year lows, and the Wenhua Commodity Index has hit a more than two-year high—so why haven’t steel prices risen at all? A price increase of just RMB 20–30 would be enough to turn the industry’s losses into profits. In January–February, profits at key industrial enterprises nationwide grew by more than 15% on average, so why is the steel sector still posting losses? At the end of the day, the root cause lies within the industry itself. We have consistently emphasized that short-term market conditions are not the main issue: over the past six months, monthly average price fluctuations have never exceeded RMB 100, and the real key is the business model. Currently, the biggest source of market disruption remains the conflict in the Middle East, which has virtually eliminated the likelihood of Fed rate cuts this year and has already locked in negative impacts on global economic growth—though the exact magnitude of those impacts remains uncertain. In the short term, the conflict is mainly affecting financial markets; the longer-term transmission to the real economy has only just begun. Amid market turmoil, the most important thing is to maintain stability and wait for opportunities that offer greater certainty. The market will likely continue to trade in a volatile range. Against the backdrop of severe overcapacity in the industry, the only chance for steel prices to stage a meaningful rally is through supply-side reforms aimed at curbing unhealthy competition and “involution.”