Strengthened cost support highlights bottoming-out characteristics of the steel market.
Although steel prices have fluctuated recently, the bottom support has been continuously strengthened, the overall industry risk has been gradually released, and the market's bottoming-out and stabilization characteristics are becoming increasingly apparent. Supported by multiple favorable factors such as high raw material costs, industry policy support, and a reasonable inventory structure, the downside potential for steel prices has continued to narrow, and the overall market resilience has significantly increased.
Raw material costs have become the core force supporting steel prices. The upstream raw material market is generally strong, with prices of core raw materials for steel production such as iron ore, coking coal, and scrap steel fluctuating upwards, pushing up steel mills' production costs. Affected by rising raw material costs, the production profits of most steel mills have been squeezed, with some small and medium-sized steel mills even operating at a marginal profit. Their willingness to actively lower prices to ship goods has significantly decreased, creating a strong atmosphere of price support in the industry and curbing the possibility of a sharp drop in steel prices from the source. At the same time, the stability of supporting costs such as energy and transportation has further consolidated the bottom foundation of steel prices.
Policy signals for stabilizing the industry continue to emerge, with policies on capacity control, environmental regulations, and standardized industry development being implemented. These measures have effectively optimized the industry's supply structure, prevented disorderly capacity expansion, and promoted continuous improvement in the market's supply and demand dynamics. These policies aim to guide the steel industry towards high-quality development, eliminate outdated capacity, strictly control the release of inefficient capacity, stabilize market supply in the long term, and avoid extreme market conditions leading to supply-demand imbalances.
While demand is weak in the short term, there is no risk of a sustained collapse. Manufacturing demand is steadily increasing, while construction demand is in a period of relative dormancy. The market as a whole is in a bottoming-out recovery phase, with price fluctuations mainly characterized by small swings and no significant price increases or decreases. Industry institutions predict that as cost support continues to strengthen and market risks are fully released, the steel market will gradually break free from its weak and volatile pattern. Driven by a steady recovery in demand, a moderate recovery is expected, and the overall profitability of the industry will gradually improve.
Service E-mail
Tel
Address
Add : Shandong Province