Two Major Meetings Conclude & Fundamentals Imbalance Relatively Small; Steel Prices Are Expected to Fluctuate Rangebound This week

Last week, the ferrous metals series prices declined first and then rose. On the news front, the Central Politburo meeting was held, proposing to significantly boost consumption next year, implement a more proactive fiscal policy and moderately loose monetary policy, and strengthen extraordinary countercyclical adjustments. Mid-week, import and export data was released, showing that from January to November, cumulative steel exports reached 101.152 million mt, up 22.6% YoY.

Looking into this week, important meetings will gradually conclude, and the effects of policies are to be observed. Recently, there has been an increase in steel mill maintenance, leading to a downward trend in pig iron production; in terms of steel, inventory of the top five materials continued to decrease last week, with no apparent industry imbalances; in the short term, fundamentals risks are low, coupled with some positive macro expectations in Q4, providing strong support for steel prices. Steel prices are expected to fluctuate rangebound this week, with limited upside and downside potential.