11/12/2023
Last week, the steel market witnessed a notable shift. The supply of the five major steel varieties decreased by 12.63 million tons, a drop of 1.2% from the previous week. This reduction in supply was primarily driven by a contraction in steel mill profits and a decrease in orders, leading to a production cutback for balance. In terms of inventory, the total stockpile of these steel varieties fell by 0.8%, amounting to a reduction of 11.04 million tons. The decline in inventory was largely attributed to a decrease in demand for construction materials due to seasonal factors, while the supply of hot-rolled coils saw a marginal increase.
Looking ahead, steel prices are expected to remain volatile yet strong. The profitability of steel mills, especially electric arc furnaces, remains reasonably good, suggesting a potential increase in construction material production. However, maintenance activities in mills might pressure the production of flat steel. Seasonal factors will continue to impact the consumption of construction materials, while flat steel consumption is expected to remain stable due to lesser weather-related impacts.
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