China's domestic steel market forecast in March

From the perspective of the international economic environment, the European Central Bank and the Federal Reserve have reiterated that monetary policy will continue to be loose in order to promote economic recovery. Under the global monetary easing, global inflation expectations continue to strengthen, which is positive for the trend of bulk commodities, and thus forms a linkage support for the prices of domestic black products in China.

From the perspective of China's domestic economic environment, China's economy will continue to recover in 2021, driving further growth in steel demand, and the apparent consumption of crude steel will increase by more than 2%; the follow-up Ministry of Industry and Information Technology may formulate supporting plans to reduce production, which will help improve the relationship between market supply and demand.

The current prices of iron ore and coke are still running at a high level, and the supporting effect of cost on steel prices in the future is still strong. Recently, five places in Hebei, including Tangshan, Handan, Baoding, Cangzhou, and Qinhuangdao, have launched Level II responses to severely polluted weather. In particular, Tangshan City has increased the treatment of gaseous pollutants in steel enterprises and launched a daily report system for deep control of steel enterprises' engineering emissions reduction. The release of regional production of related steel products has been suppressed. In March, as major engineering projects in various regions enter the implementation stage, steel demand will gradually be released. Under the joint promotion of cost and demand, steel prices still have a certain room for increase. However, steel prices are currently rising at a large rate and at a rapid rate, and downstream demand capacity is insufficient, and high-level risks are gradually accumulating. There may be adjustment pressures in the short term.