Can steel prices revive in March?

The domestic spot steel market remains weak and market confidence is still insufficient. At present, the market price of construction steel has approached the cost price, and the willingness of the next-tier merchant to reduce prices may be lower than the previous period. A new round of ex-factory prices for the representative manufacturers of construction steel has launched a “pan plate,” and the number of construction sites started after the weather has warmed will gradually increase, and demand will improve. According to the latest market report provided by relevant agencies, the social inventory of major domestic steel products has increased for several weeks and has now risen to a new high in recent years. Judging from the current situation, the release of demand from the steel industry still cannot be overly optimistic.

In the construction steel market, the price drop was also relatively large. Hefei, Nanchang, Changsha and many other markets lost a ton of between 110 and 190 yuan. After the Lantern Festival, many merchants reported that the situation was not smooth and the market turnover was not changed. The apparent increase in social inventory has brought certain psychological pressure to the business. In the plate market, the weakness remains. The plate prices continued to drop. Changsha, Tianjin, Shijiazhuang, Xi'an, and other regions witnessed a more significant decline, with a drop of around 80 yuan per ton. The overall market turnover was poor, and market sentiment was pessimistic. Even if the prices fell, the downstream procurement enthusiasm was still low. After the price of hot-rolled coil went down all the way, the decline gradually narrowed. According to people in the market, the steel market always feels that there is not enough support for terminal demand. In addition, during the Spring Festival, the inventory of the market has increased significantly. Some businesses that have more stock on hand and tighter funds have started to throw goods.

For the second trading week after the Spring Festival, the confidence of the spot steel market has been affected due to the fact that the terminal demand has not yet been significantly released, the steel mills have a high output, and the steel society stocks have increased rapidly. The spot price of all major steel products generally fell, until the weekend's decline has only shown signs of slowing down. The average daily output of crude steel in the country exceeded 2 million tons in mid-February. This is the first time since last October. On the one hand, steel output and inventory pressures are simultaneously raised; on the other hand, the downstream demand of the steel industry cannot be over-optimistic. Under the background of excess steel production capacity, even if the macro economy has recovered, it is not enough to fundamentally improve the overall steel industry's operating status. It is estimated that the steel market is still dominated by the pattern of weak consolidation.