Steel prices to hover at highs this week as supply-demand imbalance is not obvious

Ferrous metal prices fluctuated at highs last week amid news fallout. In the middle of last week, relevant regulators announced that they will strengthen joint supervision of futures and spot prices of relevant raw materials. Therefore, ferrous metal market saw high volatility. Subsequently, there were further targeted measures to ease the financial pressure of real estate companies and the financial regulatory authorities’ plan to expand whitelist of real estate companies, significantly boosting market sentiment.

In the future, given strong cost support, no inventory build-up and positive macro sentiment, steel prices are still expected to trend higher, but may subsequently retrace down owing to demand weakness.