In May, domestic ferrous metal prices surged and then fell back. In the first half of the month, production resumption of steel mills drove up iron ore, coking coal and coke prices, supporting the continuous rise in costs. The overall steel inventory was digested smoothly. Additionally, the macro real estate support policies were further strengthened. As a result, the first half of May saw a cost-driven increase in steel prices.
In late May, it became increasingly difficult to reduce steel plate inventory, and CRC and HRC inventories tended to accumulate. Moreover, towards the end of May, rumours of crude steel production cap resurfaced, causing iron ore futures prices to plunge, resulting in a significant decline in ferrous metal prices at the end of May.
Looking ahead, it is expected that ferrous metal prices will experience wide fluctuations in June. Steel mills kept production at a high level, supporting iron ore and coking coal prices. The instability of domestic coal mine production leads to a further upward trend in coking coal prices. The overall steel inventory reduction also provided solid support for ferrous metal prices. However, considering that downstream consumption entered the off-season and high production deteriorated the fundamentals of steel, it is expected that ferrous metal prices will barely rise. Therefore, with upward pressure and downstream support, ferrous metal prices will fluctuate widely.
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