Macro Trading Returns, Short-term Steel Prices Have Stronger Upward Momentum

Last week, the ferrous metals series prices fluctuated rangebound, with iron ore performing stronger than other ferrous metals series. On the macro front, the domestic market was in a macro vacuum period last week. Near the weekend, continuous market rumors drove the futures market up. In the spot market, due to temperature impacts, demand for rebar and sheets & plates in north China declined, while demand for sheets & plates in south China remained resilient.

In the short term, according to the SMM survey, steel mills still have the potential for new maintenance, with limited increases in pig iron production and stable cost support. For steel products, although there is a seasonal weakening trend in construction steel demand, supply is also expected to decrease accordingly. The manufacturing sector is rushing to export, showing resilient demand, and the inventory of the five major steel products is expected to continue to deplete. Overall, there are no significant contradictions in the fundamentals of steel. As we enter the macro cycle this week, the market trading focus is expected to shift, and short-term steel prices are likely to be driven upward by macro logic.