Forecast: Steel Inventory Continues to Decline, Steel Prices Unlikely to Break Out of the Volatile Range in the Short Term

This week, the ferrous metals series prices fluctuated rangebound. On the news front, at the beginning of the week, the fiscal work conference emphasized the need to implement a more proactive fiscal policy by 2025 and to deploy a stimulus policy package. Meanwhile, the National Housing and Urban-Rural Development Work Conference highlighted the goal of stabilizing the real estate market by 2025. In the spot market, steel prices stabilized after earlier declines during the week, with end-user purchasing sentiment improving and transactions showing WoW improvement.

In the short term, with winter stockpiling expectations, raw material prices are unlikely to exhibit a clear trend. For steel, steel inventory continued to decline this week, with demand resilience remaining strong despite the off-season, while export data fluctuated at high levels, and the imbalance in steel fundamentals remained relatively small. Recently, the spread of HRC-rebar profit margins has narrowed, raising concerns about further price fluctuations and potential impacts on production switch. In the absence of macro policy stimulus, short-term steel prices are not likely to rise.