Inventory piling-up will pose resistance to rising steel prices in the short term

Ferrous metal prices moved upwards last week. At the beginning of the week, there was news that some domestic coking plants gathered to discuss about additional production restrictions and reduction or halt of the purchase of pricy coal. In the middle of the week, the first round of coke price cuts was implemented. In the second half of the week, ferrous metal futures price uptick shored up market sentiment. In the spot market, steel market firmed up amid more bargain hunters and speculative demand hike.

Looking at this week, peaking pig iron output and surging ore stocks at ports will make it difficult for raw material prices to gain further. Apparent steel demand shrank last week. Slow inventory build-up will likely make it challenging for steel prices to rise this week.