The post-holiday steel market may be "turned over" as prices remain relatively stable, but underlying challenges persist. According to recent monitoring, the average price of 6.5mm HPB300 high-line in 24 major cities nationwide is 3,436 yuan/ton, unchanged from the previous trading day. Meanwhile, the average price of 20mm HRB400E rebar stands at 3,372 yuan/ton, down by 1 yuan/ton, while 20mm HRB400 rebar is priced at 3,342 yuan/ton, a decrease of 2 yuan/ton compared to the prior day.
Analysts suggest that short-term macroeconomic policies have limited impact on the steel sector. Market participants should not overestimate the demand for steel driven by policy investments. If steel companies continue with their traditional expansion strategies without innovation, the industry will struggle to achieve real improvement.
In terms of production, China’s Steel Association reported that the daily crude steel output in mid-April reached 2.28902 million tons, up by 128,600 tons from the previous period. However, analysts believe this surge is likely due to an over-correction in data collection, particularly from non-key producers. These companies may underreport their actual output, leading to inflated statistics. In reality, the increase in production is minimal—only 0.12%, which is almost negligible.
On the demand side, cold-rolled steel is mainly used in the automotive and home appliance sectors. With urbanization, rising incomes, and shifting consumer preferences, the auto industry has seen strong growth. According to the China Association of Automobile Manufacturers, March saw record-breaking production and sales figures. From January to March, both production and sales grew steadily, with passenger cars showing slightly slower growth than the previous year, while commercial vehicles outperformed last year's performance. This suggests that downstream demand will likely remain steady in the near term, though it remains uncertain whether increased output can be matched by demand.
Inventory levels have also decreased. As of April 25, total steel inventories in five major Chinese cities (rebar, wire rod, hot-rolled, cold-rolled, and medium-thick steel) stood at 16.7011 million tons, a drop of 657,800 tons from the previous week.
Looking at broader economic news, Nanning has eased housing purchase restrictions. The local housing authority announced that residents in Beihai, Fangchenggang, Qinzhou, Yulin, and Chongzuo can now buy homes in Nanning according to the city’s resident policies, starting April 25, 2014. This move is part of broader regional development initiatives aimed at boosting the Guangxi Beibu Gulf Economic Zone.
Internationally, the European Central Bank (ECB) is expected to continue its monetary easing. In 2013, the ECB reduced its balance sheet by 15%, but this year, it may mark a turning point. The ECB’s total assets reached 174.2 billion euros (about 235.1 billion U.S. dollars) in 2013, a 15% increase from 2012. Meanwhile, the Federal Reserve held assets worth $4 trillion, and the People's Bank of China had assets as high as $5 trillion during the same period.
In summary, the peak season for the steel industry, known as “Jin San Yin Si,†has largely passed, and the market is quickly moving into off-season. With no significant positive news on the horizon, the steel market is expected to face continued pressure unless there is a major catalyst. Without clear benefits, the market may struggle to regain momentum.
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