The off-season effect of demand is evident, with steel end-user transactions remaining weak.
As end-user industries enter their traditional off-season, demand in the steel market remains weak, resulting in a sluggish overall trading atmosphere and persistently low spot market transaction data. This has become a core factor restricting steel price increases. Industry survey data shows that overall end-user procurement volume has continued to decline month-on-month recently, with downstream enterprises showing insufficient enthusiasm for stockpiling, resulting in a market characterized by weak supply and demand.
The construction steel market is showing the most pronounced weakness. Affected by seasonal weather conditions such as heavy rain and high temperatures, the construction progress of outdoor infrastructure projects and real estate projects has slowed down, with some construction sites temporarily reducing their construction time, leading to a significant contraction in demand for long products such as rebar and wire rod. Most construction companies are adhering to a just-in-time procurement principle, completely abandoning the centralized stockpiling model, resulting in persistently low transaction volumes for essential needs. Trading pressure is gradually emerging, and some regions are seeing slight price reductions to move inventory.
The industrial steel market has performed relatively well, demonstrating strong resilience. As the transformation and upgrading of the manufacturing industry continues, market demand for high-end plate steel and special-purpose steel is steadily increasing. Steel demand from industries such as construction machinery, shipbuilding, photovoltaic equipment, and home appliance manufacturing is maintaining stable growth, effectively supporting the stable price operation of plate steel products such as hot-rolled coils and medium-thick plates. This has limited the overall decline in the steel market and prevented a comprehensive downturn.
Regarding inventory, the overall industry inventory reduction rate has slowed, with social and steel mill inventories accumulating slightly, but overall remaining within a reasonable range, posing no risk of inventory backlog. Steel mills generally have a strong willingness to maintain prices to ensure stable production and operations. Coupled with high raw material costs, there is no basis for a significant drop in steel prices. Industry insiders indicate that the market will remain constrained by the off-season demand in the short term, making a significant recovery in transactions unlikely. The market will continue its weak and volatile trend. Once the seasonal off-season ends and end-user construction fully recovers, steel demand is expected to see a concentrated release, driving a market recovery.
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