"Production restriction order" is hard to add momentum to steel price

At present, the limiting factors are still in the steel market. Handan City, Hebei Province, recently issued the "production regulation plan for key industries in the second quarter of 2021" in Handan City, and the iron and steel industry has become the key target of regulation. It is estimated that according to the regulation plan, the average daily hot metal production of Handan City in the second quarter will decrease by 14100 tons to 126700 tons. The intensive "production restriction order" further narrows the resource release of the supply side of the steel market, which is conducive to the improvement of the contradiction between supply and demand of the market fundamentals.

As far as the current market is concerned, driven by the production restriction factor, the long capital in the futures market is trying to hit a new high, and the low price resources in the spot market are also moving towards a higher level. However, in the view of industry insiders, the upward space brought by this round of "production restriction order" to steel price is limited, and the possibility of steel price reaching a new high is not great.