Will China's steel price rise in the short term

Supply side: according to the latest data of China Steel Association, the average daily output of crude steel of key steel enterprises in June was 2.298 million tons, up 2.74% on a month on month basis and 4.03% on a year-on-year basis, setting a record high.

According to the survey, the weekly crude steel output of 71 EAF steel plants in China decreased by 4.5% compared with the previous week, mainly due to the poor sales in high temperature and rainy season, and the enterprise benefit continued to decline. The utilization rate of blast furnace ironmaking capacity of 247 steel plants last week was 93.35%, which was basically the same as that of the previous week.

Demand side: meteorological monitoring shows that heavy rainfall has started again from the eastern part of Southwest China to the middle and lower reaches of the Yangtze River. It is expected that persistent heavy rainfall will cover the above areas in the next four days. Today's steel futures is in stronger operation, stock trading volume is OK, but sustainability is questionable.

On the whole, the rainy season in southern China continues this week, and it is expected that steel demand will not improve significantly. Due to the continuous contraction of profits, EAF plants have begun to decrease slightly in early July. The intensity of production restriction of Tangshan steel plant remains to be observed, and the supply of steel industry is expected to decline at a high level. The supply and demand of the steel market are weak and the fundamentals are weak. At present, the domestic economy is accelerating repair, and the monetary environment is relatively loose. Recently, the domestic stock market has continued to rise, and the market sentiment of commodity futures has also been boosted. In the short term, steel prices or narrow shocks, rising and falling each other.