As the important meeting approaches, steel prices are expected to fluctuate more widely this week

Last week, the ferrous metals series prices first declined and then rose. On the news front, NBS data showed that June CPI decreased MoM due to seasonal factor but continued to rise YoY; the national PPI decreased MoM. Foreign media reported that China's Ministry of Finance is about to take a major fiscal measure, leading to strong wait-and-see sentiment in the market. In the US, June CPI cooled more than expected, and after the data was released, the probability of a rate cut in September soared. In the spot market, steel prices ran weak at first and then strong, with moderate end-user purchasing demand.

In the short term, given the profits of steel mills and the slow decline in pig iron production, the rigid demand from steel mills may support furnace charge prices. On the steel side, although the important domestic meeting approaches and the macro environment is positive, steel prices have limited upward room due to suppressed demand in the off-season. Attention should be paid to policies to be discussed in the meeting.