How does China's steel price work in the short-term

On the supply side, under the current situation of considerable steel profits, steel mills are still enthusiastic about production, long-process output continues to rise, and short-process output has been maintained at a historical high. In terms of imports, due to the recent sharp rise in domestic billet prices in China, the spread between domestic and foreign billet prices has widened significantly, which is conducive to the import of billet later.

On the demand side, in terms of building materials, the latest inventory data of various institutions show that the total inventory of building materials continues to decline sharply, the de-stocking performance is good, and the demand has rebounded, indicating that the downstream de-stocking of building materials is good, but with the recent sharp increase in steel prices, the latest research shows that construction units have slowed down in the purchase of building materials. In terms of steel sheet materials, although the inventory of various types of sheet materials continued to decline, the decline in inventory has narrowed, indicating that the downstream demand for sheet materials has slowed down.However, in terms of export, with the recent sharp rise in China's domestic steel prices, China's domestic and foreign price differentials have narrowed significantly, but China's domestic cold rolling steel and foreign price differentials are still at a high level, and it is expected that there is still room for cold series steel coil export in the later stage.

On the whole, although the supply increment of the current steel market is limited, the demand also shows signs of slowing down. At the same time, after the sharp rise of steel price in the early stage, the high-level attention to the rise of steel price in the near future has increased, adding up with the bad macro effect at home and abroad, it is expected that the short-term steel price may fluctuate weakly.