This week, due to the recovery of coking coal market sentiment and China and the United States held telephone communications on trade issues, the black market sentiment has recovered and steel prices have rebounded slightly. Overall, there is little contradiction in the fundamentals of the steel market at present, but there is still a lack of obvious upward drive in the short term. The market operation is mainly fluctuating, and investors need to pay attention to the changes in several key variables.
1. Supply end: threads decrease, hot coils rebound
From the output of the five major materials, the overall change is not large, but the structural differentiation is obvious. Among them, the production of rebar continues to decline, mainly affected by the maintenance of rolling mills in some steel mills and the transfer of molten iron resources to other varieties. It is currently at a historical low in the same period. In terms of hot-rolled coil plates, some steel mills resumed production one after the preliminary maintenance, driving the production of hot-rolled coils to rebound to the same period's high.
This change in supply structure also has a certain differentiation effect on the market: the thread resources are tight and the price support is strong; the production of hot coils has increased, and the inventory pressure has increased.
2. Demand side: Seasonal decline, and the off-season still needs to be observed
The Dragon Boat Festival holiday combined with weather factors has led to a month-on-month decline in total demand for the five major materials, which is slightly lower than the same period last year. It is currently the traditional off-season, and whether demand can maintain a high level still needs to be observed. In particular, the pace of starting terminal projects has slowed down, and the short-term pulling effect on steel is weak, which has become one of the main factors that suppress the upward trend of steel prices.
3. Inventory data: a small destocking, hot coil inventory stopped destocking and increased
Total inventory continued to have a small destocking trend, among which thread inventory contributed the main decline, reflecting its relatively better transaction situation. In terms of hot coils, against the backdrop of rising supply, inventory has changed from decline to increase, and the market remains cautious about the balance between supply and demand of hot coils in the future.
However, from a historical comparison, the current total inventory level of the five major materials is still at the same level in recent years, which provides a certain safety margin for market prices.
4. Future market outlook: The oscillation pattern continues, focusing on three major factors
In the short term, the black market lacks clear upward action, and steel prices are expected to be mainly volatile. The market trading logic still revolves around the game between "demand decline expectation" and "cost support". As one of the key raw materials, coking coal has a significant impact on steel mill profits and finished materials prices.
It is recommended to pay attention to the following three core factors:
- The difference in demand height and expectations: Whether the actual terminal demand exceeds market expectations will directly affect the steel price center level;Inventory disposal speed: Whether the threads and other varieties can maintain effective destocking is an important indicator to measure the balance of supply and demand;Coking coal market trend: If the price of coking coal continues to rise, it may form cost support for the finished material prices.
Overall, in the context of the existence of macro uncertainty and the temporary stability of fundamentals, it is difficult for steel prices to have a trend in the short term, and market operations need to pay more attention to the evolution of phased opportunities and game logic.
