Ferrous metal market swung on an upward trajectory last week. During last week, the US CPI data for October was lower than expected. In addition, President Xi Jinping was invited to attend China-US Presidential Meeting with US President Joe Biden. Therefore, the market sentiment was shored up. In the second half of last week, relevant departments announced that they would strengthen supervisions on iron ore market. Subsequently, a fire accident occurred in the Yongju Coal Mining Building in Luliang, Shanxi, and the news of the mine suspension for rectification triggered coking coal and coke price upticks. Therefore, finished product prices followed the hike.
In the future, short-term cost support will be strong. As improved profits will lift steel mills’ enthusiasm for production, rebar and HRC output will hike, while downstream demand will soften seasonally. Therefore, fundamentals will hardly sustain steel price gains. Players will need to be wary of the possibility of a fallback in steel prices.