Price trend

Last week, due to favorable policy information and the continuous rise in raw material prices, the black series futures market saw a significant increase, leading to increased demand in the steel market. Terminal users stocked up appropriately, boosting market sentiment and causing steel prices to rise in various regions. According to the Commodity Market Analysis System of SunSirs, Ordinary medium plate (material: Q235B; Specification: On July 25th, the price was 3,402 RMB/ton, an increase of 2.04% compared to Monday.

Influence factor

Steel billet market: Domestic steel billet prices surged significantly last week. As of July 25th, the tax inclusive price of Tangshan ordinary square billets was quoted at 3,120 RMB/ton, an increase of 120 RMB/ton compared to the previous week. In terms of inventory, Tangshan's main warehouse inventory was 806,700 tons, an increase of 22,500 tons from last week’s previous week. In the first half of the week, due to the strengthening of the black series market, the cost prices of raw materials increased, and market trading improved, the quotes of raw material manufacturers continued to rise; In the second half of the week, the futures market saw a slowdown in gains, with middlemen cashing out at high levels and market prices consolidating at high levels. It is expected that the rising cost of raw materials will support some businesses to cash out, and it is expected that the domestic steel billet market will mainly consolidate at a high level next week.

Supply and demand side

Last week marks the beginning of the summer season, with high temperatures persisting in most parts of the country and heavy rainfall in some areas, resulting in overall sluggish terminal demand. However, the futures market saw a significant increase, boosting market sentiment. Some terminals strengthened their inventory, leading to a corresponding increase in speculative demand. After Thursday, there was a long short game in the futures market, and procurement demand slowed down slightly.

Market outlook

Overall, last week's "Sanfu Tian" season had begun, with most parts of the country experiencing sustained high temperatures and a slowdown in outdoor construction progress. However, with multiple ministries and commissions speaking out against "internal competition", Northwest steel enterprises strengthening industry self-discipline, and tight supply of coking coal pushing up prices, black series futures varieties had attracted great attention, and funds had flooded the market. The significant rise in futures prices boosted spot sentiment, and the price increases of steel companies in various regions had helped to boost prices. As a result, spot prices surged significantly. As of July 25th, rebar prices reached a new high in four months. Considering that some merchants took profits and cashed out, the basic demand during the off-season remained unchanged, and market sentiment had eased, it is expected that the domestic mild steel plate market will continue to operate strongly next week.

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