News summary

Domestic steel mills 'profitability increased month-on-monthwizardofbaccarat, port iron ore inventories hit new highwizardofbaccaratProperty market policies in second-and third-tier cities stimulate demand, and steel prices are expected to fluctuate strongly, with an increase of 20-40 yuan/ton.

Newsletter text

The steel market is volatile and investors need to pay attention to multiple factors. The Federal Reserve has sent hawkish signals and the US dollar has strengthened. At the same time, commodity prices suffered a correction, affecting capital investment expectations. Although the output of domestic steel mills increased slightly, the demand for balance sheets fell, market transactions fell, real estate policies were implemented one after another, and funds entered into projects, providing support for the steel market. A survey on the month-on-month increase in steel mills 'profitability showed that the blast furnace operating rates of 247 steel mills were the same as last week, and the utilization rate of ironmaking capacity declined. Steel mills 'profitability increased month-on-month, showing production enthusiasm, maintaining stable demand for raw materials, and having a positive impact on the trend of steel prices. Port iron ore inventories hit new highs. Imported iron ore inventories at 45 ports across the country have reached new highs. Although the arrival of foreign ore to the port has decreased, inventories have continued to increase. Affected by this, cost-side support weakened, creating a negative impact on steel prices. New property market policies boost demand for steel. New real estate policies in Wuhan, Hefei and other places have been implemented, reducing down payment ratios and mortgage interest rates, stimulating market enthusiasm, and gradually releasing demand for just-needed and improved housing, providing support for steel use. LPR remained stable, leaving expectations for interest rate cuts in June. Monetary policy improved, which had a positive effect on the trend of steel prices. Spot market prices are strong. China Steel APP data shows that the prices of building materials, hot coils, medium and thick plates and other products have all increased this week. The price of carbon billet has risen cumulatively in a week, indicating that the spot market is operating strongly. The futures market fluctuated at a high level at night and black futures prices fluctuated slightly and remained strong. The prices of futures such as rebar, hot coil, and coke have increased, reflecting the positive expectations of the futures market for the steel market. Macroeconomic policies and supply and demand fundamentals affect steel prices. As macro-policies and measures to stabilize economic growth have increased, positive real estate measures have been intensively released, terminal demand for steel has weakened, and total inventories have declined. Steel prices are expected to fluctuate strongly in the short term, and merchants remain cautious and wait-and-see attitude.