Short term steel price forecast

At the present stage, the fundamental structure of the five major steel varieties is performing well, with overall production increase and inventory removal, and consumption rebounding, which can support the spot market and confidence. In the short term, there is still some room for increase in the supply and demand levels of the five major steel varieties. However, if the supply recovers faster than the demand in the later stage, it will lead to fundamental structural imbalances, stimulate supply and demand contradictions, and suppress spot prices.

In addition, at present, the transmission of profits in the industrial chain is still not smooth. High fluctuations in raw materials have led to persistent high production costs for enterprises, which has resulted in almost upside down profits at downstream terminals. Therefore, the proportion of speculative demand will significantly decline after the completion of just needed procurement and early inventory preparation operations.

Overall, in the short term, steel prices will continue to fluctuate on the premise of good fundamentals. However, combined with recent macroeconomic disturbances at home and abroad, there is a risk that raw material prices will be suppressed, driving down costs, and then causing steel prices to fall back.