SHANGHAI, July. 23 (SMM) --
A temperate steel price rally doesn't mean the actual improvement of steel market that is haunted by high inventory and sluggish demand. Bids from large steel mills for EMM are not expected to be optimistic under current sluggish market condition. Meanwhile, situation is still sluggish at downstream stainless steel industry and producers continue to cut production, so purchases from stainless steel industry are expected to be sluggish. Moreover, most traders are not wiling to chase high prices when market trend is not clear, and it is expected that purchases will be few from traders.
Producers are expected to continue adopt a wait-and-see attitude under the context of temporarily EMM price rally, and operating rates at EMM main producing regions are expected to remain low. With regard to raw material, prices of manganese ore are expected to stay firm, as impact from Huayan mining flood incident still lingers. High electricity prices have already become a fact, so production costs from EMM producers in main producing regions will still hover at high levels.
Although operating rates at main producing regions are low, any upward momentum of EMM prices will be dampened as actual demand hasn't improved. Domestic EMM prices will advance slightly and may even run risks to fall under the stagnant sentiment.
SMM predicts that mainstream EMM prices will move between RMB 14,600-14,800/mt in the following week.
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