Relief is coming? There is still room for decline in steel prices?

Relief is coming? There is still room for decline in steel prices?

Today, the steel market has plummeted, and the decline has converged slightly. Following the plunge yesterday, today’s steel market market still did not stop falling, and futures and spot continued to reach a new low since the fall of March. Judging from this wave of markets, it is more similar to the sharp decline on March 16th, which is characterized by rapid and fast.
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In fact, the basic situation of the market will not change sharply within two days, such as inventory, output, high and low changes, not these two days, there are demands, nor the sudden turn to the two days. Essence Therefore, the news of liberty is constantly being released, and many factors are the appearance of decline in market prices. The underlying logic must be the inner contradiction to a certain extent and detonate at a certain point.
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Taking supply and demand as an example, the average daily crude steel output increased from November 24.85 million tons last year to more than 2.85 million tons from January to February this year. Especially after the Spring Festival, the growth of steel mills was very obvious, and the operating rate of blast furnaces and electric furnaces generally rebounded. However, demand has been weakening and recovery. It was not until March of the Fortune New China Manufacturing Purchasing Manager Index (PMI) of 50.0, a decrease of 1.6 percentage points from the previous month. The problem is less than expected, the problem of insufficient recovery. Including the reduction of external orders, the status of consumer demand, etc., the road of recovery is tortuous, not as optimistic as the market, and even always optimistic expectations.
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At present, the market is still fragile, and market quotes and various transaction routines are relatively chaotic, and they have not seen signals to stop falling. In a short period of time, demand will have staged adverse effects with the decline in price and weather factors, but in the end, the industrial logic will concession in the macro trend during the “recovery” process. The risk point lies in the difference in the foundation difference in April, the pressure on selling goods is also great, the “weak reality” caused by overseas and empty overseas, and the demand continues to be weakened. Too deep.

Post time: Apr-06-2023

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