Steel prices to swing narrowly next week

Ferrous metal prices rebounded this week. In terms of news, March saw a rise of 1.7 percentage points MoM in the manufacturing PMI, increase of 1.6 percentage points in non-manufacturing business activity index and growth of 1.8 percentage points in comprehensive PMI output index. In the middle of last week, the MIIT held a working meeting on stabilizing growth and increasing efficiency of steel production. Market rumours involved steel production cuts and restrictions. In the spot market, steel price uptick largely boosted end-users’ stockpiling and speculative demand.

Looking at next week, weakening cost support and limited demand growth may make steel prices swing narrowly. In the medium term, production resumption amid raw material price discounts could potentially exacerbate oversupply, which may weigh down steel prices. A focus need to be put on HRC exports.