The offshore engineering steel price does not have the motivation to continue to fall at present

With the advent of the peak season, the price of offshore engineering steel that has experienced a rapid decline has gradually approached the bottom. The possibility of a continuous unilateral drop in the later period is unlikely, and the short-term adjustment will be based on weak shocks. The reasons are as follows:

First, the market supply and demand pattern has not been broken. This round of marine engineering steel price adjustment is the result of capital impact, and the market supply-demand relationship has not substantially deteriorated, and it does not support the continuous decline of marine engineering steel prices. In the later stage, under the influence of production restriction, production reduction policies and the release of peak season demand, market fundamentals are expected to maintain a phased tight pattern. In this context, offshore engineering steel prices will gradually be repaired and stabilized.

Second, the “double focus” still supports the price of offshore engineering steel. Despite the sharp drop in the price of imported iron ore, the prices of coking coal and coke remained firm. Under the current situation of a sharp correction in mine prices, the pressure on the production cost of offshore steel companies is not great. Therefore, the acceptance of the increase in the coke price is acceptable. It is expected that the price of coke is likely to rise and hardly fall in the short term, which will have a certain blocking effect on the callback of marine engineering steel prices.

Third, after experiencing the previous sharp drop, the high risk of the futures market has been effectively released, the market pessimism has been accelerated to repair, and the futures price will gradually stabilize, and it is unlikely that the futures market will continue to fall sharply.

Overall, the current steel market for marine engineering has not shown signs of a sustained decline in the market. As the bad news is gradually digested, the price of offshore engineering steel will not continue to fall.