Macroeconomic benefits promote the improvement of commodity valuationsluckywinslots, the black sector is favored by funds. Despite weak terminal demand, the issuance of special bonds has accelerated or slowed down the decline in demand for building materials. The speed of steel removal is expected to be maintained. Against the background of the height of molten iron and abundant supply of charge, structural mismatches between supply and demand may lead to an increase in valuation. The inventory of finished products is stable month-on-month, and the output of electric furnaces is expected to increase; the demand for plate materials is highly resilient, and policies are good for demand for home appliances, but the demand for construction steel still needs to be observed. Iron ore prices fluctuated and fundamental pressure continued; coal tar supply recovered, and policies stimulated expectations to improve terminal demand. Alloy cost support has strengthened, and demand is expected to improve under the stimulation of real estate policies. Risk factors include demand and policies that exceed expectations, as well as intensified macro risks and accumulated reserves that exceed expectations.
Macroscopic positive sentiment continues, funds flock to the black sector, and the overall valuation of the commodity market has improved this week. Although the performance of spot demand is still weak, the issuance of special bonds has accelerated and the decline in demand for building materials has narrowed, indicating that market confidence has gradually recovered.
[The difficulty in removing steel from warehouses is due to a sharp decline in demand]. The increase in immediate profits of steel mills indicates that the height of molten iron may exceed market expectations, and positive feedback from the industrial chain is still continuing. Although in the long run, the supply of furnace materials is sufficient and the structural mismatch between supply and demand in the industrial chain will help adjust the valuation, in the short term, the market focus will be more on the contradiction between supply and demand.
The finished product market performed steadily this week. Although demand for rebar did not meet expectations, the month-on-month decline remained at-6%, showing the potential for warehousing in the off-season. There is limited room for growth in long-process output, while the improvement in electric furnace profits has led to a significant increase in short-process output.
The contradiction between plate stocks continues to exist. Although downstream demand remains stable, policies such as the purchase and storage of commercial housing may have a positive impact on demand for home appliances. At the same time, attention should be paid to its potential crowding out demand for steel for rental housing and affordable housing construction.
The fluctuations in ore prices were affected by bond and property market policies. Last week, prices rose first and then fell, and the spot market did not follow suit. Looking to the future, inventory pressure and policy expectations will continue to affect the trend of mineral prices, and the focus of the market's long and short game remains unchanged.
The recovery of coal char market supply has been slow, and coal mine production and Mongolian coal imports have remained high. However, safety accidents have occurred frequently and safety supervision efforts have not been reduced. The speed of production of steel mills has slowed down, demand for rolled materials has not improved significantly, and the coke market has entered a cycle of improvement and decline.
Cost support in the alloy market was strong, GEMCO resumed mining activities, manganese ore prices continued to rise, and high-quality ore transactions were active. The cost of ferrosilicon has stabilized, the production profits of alloy factories have increased, many production areas have resumed production, and output has rebounded rapidly.
Market risk factors suggest: unexpected changes in demand and policies (upside risks); intensification of macro risks and the rate of accumulation of stocks exceeds expectations (downside risks).
