SHANGHAI, Aug. 8 (SMM) – Steel prices are still in upward channel since positive factors will prevail in the short term, SMM understands.
That said, market should be alert to potential downward pressure after recent continuous gains, SMM warns.
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On the policy front, Chinese Premier Li Keqiang said last weekend that work must be done to prevent closed intermediate frequency furnaces and outdated steel capacity from coming back online. Tianjin was criticized by central government for failure to properly perform environmental supervision work.
As for supply, overall steel stocks in the market are still near record lows, SMM statistics found. Inspections of intermediate frequency furnace elimination work was carried out in early August, which will be followed by the National Games in Tianjin at the end of August, the 19th NPC meeting in October, as well as production controls in north China winter heating season that will begin in late October.
On the demand side, despite cooling property market, construction of PPP projects and infrastructure projects will release demand in the second half of this year.
All these will support gains in steel prices, SMM understands.
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