Pig iron output will still rise, short-term steel prices may dip to a limited extent

Ferrous metal prices rose first and then fell last week. Steel output and prices started last week with a good note. In the middle of last week, data showed China's steel exports were 9.224 million mt in April, down 6.7% MoM but up 16.29% YoY, showing strong resilience. In spot market, steel prices retraced down after hiking last week. Trading sentiment cooled down significantly in the second half of the week.

Looking at this week, frequent good macro news will take time to come to fruition. Given that pig iron output may reach its peak in late May, the driving force of raw material price will wane. In addition, social inventory of steel plates will increase. Steel production will hike, while actual demand will shrink. Given strong cost support, steel prices may dip to a limited extent this week.