Steel prices failed to get off to a good start after Chinese New Year, but may inch up this week

Ferrous metal prices showed mixed performance last week. Weaker-than-expected production restart of steel mills piled pressure on iron ore prices. Steel prices failed to start last week on “a strong note”, mismatching expectations. In the middle of last week, it was reported that Shanxi will carry out inspections on coal mines, leading coking coal and coke prices to cease fall and start rebound. In the spot market, downstream sectors not yet fully resumed operation. Moreover, there was recent rain and snow weather. Therefore, supply in circulation and transactions were curbed.
Looking ahead, pick-up of terminal demand and the upcoming Two Sessions will offer a buoyancy to steel prices in a short run. However, constant cold wave, rain and snow weather may slow down restart of downstream sectors. Pig iron output uptick, steel inventory slip and macro news will need to be watched.