Macro expectations will guide market sentiment, short-term steel prices will remain high

Ferrous metal market swung on a bullish footing last week. At the beginning of last week, Moody's downgraded China's rating, which blunted market sentiment. Subsequently, many departments expressed that China's economy has great development resilience and potential. In the second half of last week, there was a news about China’s two major high-level meetings to determine whether it will set more ambitious economic growth targets for 2024, significantly shoring up market sentiment. Steel futures market continued to strengthen.

Looking forward, upcoming important macro meeting and solid cost support may leave short-term steel prices with room to further make gains. However, more demand weakness and waning impact of positive macro news may add likelihood of steel prices retracing down after an initial rise.