Factors Affecting Steel Prices

According to market research, in this period, the output of building materials was 3.7595 million tons, a decrease of 556,600 tons from the previous month, the total inventory was 7.3099 million tons, an increase of 669,600 tons from the previous month, and the apparent demand was 3.0899 million tons, a decrease of 972,600 tons from the previous month; the output of hot-rolled coils was 4.0606 million tons, an increase of 46,100 tons from the previous month, the inventory was 4.2282 million tons, an increase of 195,200 tons from the previous month, and the apparent demand was 3.8654 million tons, a decrease of 66,400 tons from the previous month; the total output of building plates was 11.8554 million tons, a decrease of 486,700 tons from the previous month, the total inventory was 15.6991 million tons, an increase of 917,000 tons from the previous month, and the apparent demand was 9.9384 million tons, a decrease of 1.0297 million tons from the previous month.
In this period, under the effect of the Spring Festival, the supply and demand of sample steel weakened significantly, the inventory increased rapidly, and the fundamentals entered the most "fragile" period. However, thanks to the low inventory, it can still play a good supporting role for steel prices before the festival. In terms of sub-items, the reduction in building materials is obvious. Due to the poor "winter storage" reality and the time of resumption of work after the holiday, the supply of building materials continues to drop sharply, showing the weak production willingness of steel mills. Although the demand side also declines, it is a normal phenomenon in the market. The rhythm of demand recovery after the holiday is the key point. In terms of rolled plates, due to the conversion of steel mills and the relatively early resumption of work after the holiday, the overall supply and demand remain relatively stable. In general, although the supply and demand of steel in this period has a "cliff-like" decline, the overall inventory is still significantly lower than the same period last year. The fundamental contradictions of steel are not large, and it is expected that the supply and demand will further bottom out next week.