Price trend

According to statistics from SunSirs, the steel billet market fell slightly this week. At the beginning of the week, the steel billet price in Tangshan, Hebei was reported at 4,900 RMB/ton, and at the weekend at 4,820 RMB/ton, down -1.63% from the beginning of the week.

Analysis review

The mainstream price of steel billet declined slightly, which was affected by the policy orientation. Some steel mills received notices that they would suspend production for a period of time in preparation for party building activities. Secondly, in terms of raw materials, on June 24, the coke market was on the strong side, and the first round of increase of 120 RMB/ton was partially implemented, and the market mentality was good. On the supply side, coke companies in Shandong were expected to limit production, and some coke companies in Shanxi limited production due to safety inspections in Linfen and Changzhi, and their shipments were good, and the overall inventory was at a low level; On the demand side, the coke inventory of downstream steel mills had not yet reached a high level, and there was still a certain demand for replenishment, but the profit level of steel was not high, and there was a certain degree of resistance to the increase in coke prices.

Demand side: The apparent consumption of five major varieties of steel this week was 10.545 million tons, a week-on-week increase of 65,400 tons.

In terms of inventory: The total steel inventory this week was 21.1007 million tons, an increase of 561,800 tons on a week-on-week basis. Among them, the steel mill inventory was 6,646,600 tons, an increase of 345,300 tons on a week-on-week basis; the social inventory was 14.4541 million tons, an increase of 216,500 tons on a week-on-week basis.

Market outlook

Supply and demand fluctuated little this week, inventories further accumulated, and fundamentals continued to be weak. Relatively speaking, the prices of raw materials such as iron ore and coke have remained firm, which would further squeeze the profits of steel mills. In the later stage, they may increase their overhaul and reduce production. With the deepening of the off-season, the downstream demand for steel is still weak. Under the two weak supply and demand pattern, steel prices may hardly pick up.

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