Steel Prices To Fall Initially And Then Go Up In October

SHANGHAI, Oct 7(SMM) – In September, prices of ferrous metal surged initially and then fell back. In the first half of the month, domestic favorable policies were issued continuously. News such as the halving of stamp duties, tightening of IPOs, and reduction of financing margins temporarily stimulated the stock market. The manufacturing PMI rose to 49.7% in August.

Many places successively implemented the easing mortgage measures in the real estate market. Besides, notice on reducing existing first-home loan interest rates and adjusting and optimizing differentiated housing credit policies also encouraged market sentiment and allowed steel prices to fluctuate upward. In terms of industry, expectations for domestic production restrictions and output cuts in September once again fell through. Iron ore and coal prices rose strongly, driving up the costs of steel mills.

In terms of finished steel, downstream consumption slowly recovered in September. Under the pressure of high production, the destocking of steel inventories was less than ideal. As a result, market sentiment was frustrated. Steel prices remained volatile and became the main factor dragging down ferrous metal market conditions in the second half of the month.

Steel inventories might have peaked in early October, and the imbalance between production and demand will be further highlighted, which may drag down the ferrous metal prices. Production restriction policy in the 2023 heating season was already announced. There is still room for recovery in consumption in downstream industries such as automobiles and home appliances in October. The fundamental conflicts are expected to gradually ease in mid-to-late October, and steel prices will fall initially and then go up.