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Raw Steel Market Expects A Slight Fluctuation in June

Raw Steel Market Expects A Slight Fluctuation in June

2021-06-08

In May, driven by the surge in billet and strip steel, and the sharp rise in futures, the price of domestic construction steel rose sharply. Subsequently, with a series of policy controls, the spot price rose and fell. In terms of sheet material, market demand has been weak; downstream demand has maintained; transaction performance has been mediocre; and prices have fluctuated sharply. On the whole, the main types of steel products in South China rose first and then fell in May. Among them, scrap steel, hot coil, and rebar fell sharply, while cold-rolled steel fell slightly.

Regarding the outlook on the market in June, from the current point of view, the price of rebar has continued to return and is currently lower than the level before May Day. At the same time, iron ore, scrap steel and other raw materials have fallen less than finished products. However, entering June, the traditional rainy season and the flood season approached, the downstream demand for steel peaked and declined periodically. The fundamentals of supply and demand continued to weaken, and demand performance may not be able to support the rebound of steel prices. However, the recent frequent news of production restrictions in the North and East China has boosted market confidence to a certain extent. At the same time, as the demand for electricity continues to rise, many regions in South China have received notices of peak shifting and limiting production, which has a greater impact on the production of many short-flow steel mills. In addition, the profits of steel mills in the current market have sharply narrowed. Although regional steel mills have not made clear their intention to reduce production, as prices fall further, it has not been ruled out that some companies have plans to reduce or suspend production in order to alleviate operating pressure. All in all, it is expected that steel products in South China will fluctuate in a narrow range under the pattern of weak supply and demand in June.



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