Industry Information(1)

According to data from the National Bureau of Statistics, in May, China's crude steel output was 99.45 million tons, a year-on-year increase of 6.6%, and the average daily crude steel output was 3.2281 million tons, a month-on-month decrease of 1.7%. Crude steel production in May hit a record high again, and the average daily crude steel production in May was the second highest in history. According to data from the China Iron and Steel Association, the average daily crude steel output of key steel companies in the first ten days of June was 233,300 tons, an increase of 49,200 tons from the previous month, an increase of 2.15%, and an increase of 13.33% year-on-year.
While the output remains high. Government-level "guidance" is still continuing: The National Development and Reform Commission stated that before the end of the 14th Five-Year Plan period, there will still be room for domestic demand for crude steel to rise, and it will continue to maintain a "zero tolerance" high-pressure situation for illegal steel production capacity violations.
Regarding the general increase in commodity prices, the Ministry of Commerce stated that it would take measures to strengthen tracking. Generally speaking, the supply side and policy side do not support a sharp increase in steel prices. Cost support has become the strongest reason for steel mills to support prices. Under the disturbance of the capital market and the demand side, steel prices will fluctuate frequently.

Looking back this week, the futures range fluctuated, the spot price fell again, and the demand weakened month-on-month. From the perspective of market trends, all parts of the country tend to be consistent: in the north, market prices have fallen, and steel mills are forced to give in; in the south, futures affect sentiment, and demand suppresses prices; the north-south markets have different declines, and the regional spreads have narrowed again and resources are more abundant. It is digested on the spot.
Generally speaking, the northern steel mills have difficulty maintaining prices, and the enthusiasm for market transactions has cooled; southern demand has continued to decline, and prices have fluctuated and weakened. This week, the black futures fell again, which affected the market mentality. At the same time, the price of raw materials was strong, and the profit margin of steel mills was shrinking. Judging from the actual transaction situation, terminal demand is declining, and intermediate demand is on the sidelines, and traders choose to speed up shipments. The volatility of futures intensified, and the spot market weakened as a whole. Next, it is expected that terminal demand is still weak, and it is difficult for intermediate demand to enter the market. It can be seen that the current steel price is in the "adjustment" stage, and the demand in the north and south markets has declined. At the current stage when supply is strong and demand is weak, prices may maintain a downward trend in the later period.