Looking back at May, in the first half of the month, the central bank announced a reduction in reserve requirement ratio and interest rates, and the steel market did not see "ripples". Subsequently, the Sino-US tariff negotiations exceeded expectations, market sentiment improved, and futures and spot prices rose together, but the upward momentum was short-lived. In the second half of the month, macroeconomic policies were in a vacuum period, heavy rains continued in most parts of the south, and market operations were cautious. Some merchants reduced prices to ship goods, and steel prices fell all the way and hit a new low after the new year.

According to the commodity market analysis system of SunSirs, the price of ordinary medium plates (material: Q235B; specification: 20) was 3442 RMB/ton at the beginning of the month (May 1), and the price at the end of the month (May 30) was 3302 RMB/ton, down 4.07% from the beginning of the month.

1. Influencing factors

1. Cost situation

As of May 30, the ex-factory price of ordinary carbon square billets in Tangshan was 2900 RMB/ton, down 40 RMB/ton from the end of last month, and the price of steel billets fell. As we are about to enter June, the rainy season will bring lower demand, the profit level of steel enterprises will decline, some steel enterprises expect to increase the amount of maintenance, the top divergence of molten iron production will appear, and the demand for raw material purchases will decrease.

2. Inventory situation

According to the data of China Iron and Steel Association, in mid-May 2025, the steel inventory of key statistical steel enterprises (hereinafter referred to as "key enterprises") was 16.35 million tons, an increase of 290,000 tons from the previous ten days, an increase of 1.8%; an increase of 3.98 million tons from the beginning of the year, an increase of 32.2%; a decrease of 350,000 tons from the same ten days of the previous month, a decrease of 2.1%; a decrease of 480,000 tons from the same ten days of last year, a decrease of 2.9%, and an increase of 90,000 tons from the same ten days of the previous year, an increase of 0.6%.

3. Import and export

In April 2025, my country exported 10.462 million tons of steel, basically the same as the previous month, with an average export price of US$694.4/ton, with no significant fluctuations from the previous month. From January to April, my country exported 37.891 million tons of steel, an increase of 8.2% year-on-year, and the average export price was US$702.6/ton, a year-on-year decrease of 10.6%. In April, my country imported 522,000 tons of steel, a month-on-month increase of 4.3%, and the average import price was US$1,690.1/ton, a month-on-month decrease of 0.6%. From January to April, my country imported 2.072 million tons of steel, a year-on-year decrease of 13.9%, and the average import price was US$1,665.7/ton, a year-on-year increase of 0.3%.

2. Analysis and Forecast

Overall, in June, high temperature and heavy rain restricted outdoor construction, and entered the traditional consumption off-season, and the speed of social resource destocking slowed down. The profit level of some steel companies narrowed, and the regular safety maintenance of production lines was increased. The output of molten iron showed a top deviation, and the marginal contraction of supply was initially revealed.

In terms of raw materials, if there is no policy intervention or active production reduction, steel companies will continue to exert pressure on the raw material side to maintain their profits under the falling price market.

Taking all factors into consideration, domestic mild steel plates prices may continue to weaken in June.

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