Steel price to move rangebound this week after gains last week

Ferrous metal prices extended pre-holiday gains last week. At the beginning of last week, U.S. Treasury Secretary Yellen reiterated that she would not decouple from China. In addition, starting from April 1, 2024, raw coal tax rate in Shanxi will be adjusted from 8% to 10%, and beneficiation tax will be adjusted from 6.5% to 9%, which will increase steel production costs. There was unbalanced supply-demand fundamentals of HRC. In spot market, elevated steel prices and higher terminal buying appetites led some sellers to control shipments.

Looking forward, before large weakness in terminal demand, short-term steel prices may move rangebound this week, with possible brief rally. However, steel prices will likely dip somewhat in the mid-to-long term as oversupply worsens.