Forecast: Steel prices are expected to swing on a soft note

Last week, the ferrous metals prices fluctuated at low levels, with steel and iron ore prices performing better than coking coal and coke. The first round of coke spot price cuts was implemented. On the news front, China's official manufacturing PMI for July was 49.4%, down 0.1% MoM. Mid-week, the Politburo meeting was held, emphasizing the need for sustained and stronger macro policies. Later in the week, the US Fed's rate decision was announced, leading to a temporary improvement in overseas sentiment. In the spot market, steel prices rebounded from the bottom, with low-price transactions dominating the market.

In the short term, steel mill profits are rapidly shrinking, pig iron output is declining, and maintenance plans for multiple varieties are gradually increasing. The negative feedback and the inflection point of steel inventory are intensifying. Entering August, expectations for favorable macro front both domestically and internationally are gradually rising. However, current market sentiment remains relatively pessimistic, and new orders are under pressure. It is expected that steel prices will swing on a soft note in the short term.