Steel prices will swing narrowly ahead of the Chinese New Year

Ferrous metal prices moved upward last week. In the middle of last week, the PBC announced the first RRR cut in 2024, releasing about 1 trillion yuan in liquidity. Ferrous metal prices hiked. In the spot market, some merchants will take the Lunar New Year holidays, further lowering transactions.

Traders will have holidays this week. Pre-holiday weakness in fundamentals and expectations was about to end. After the holiday, there will be strong expectations and actual demand verification. Favorable macro sentiment and restart of steel mills will minimise likelihood of highly volatility of short-term steel prices. China's manufacturing PMI data will need to be watched this week.