Reflections on the Causes and Turning Points of the Second Steel Price Decline

The steel market experienced a significant downturn in mid-to-early August, followed by a rebound as marginal improvements were observed in the supply-demand fundamentals. However, with the arrival of the traditionally prosperous “Golden September,” the steel market once again plunged, with the magnitude of the decline attracting heightened market attention. The analysis attributes this to several factors: the daily crude steel output failed to increase as anticipated; the introduction of new national standards brought certainty to the increase in rebar production; hot-rolled coil inventories continued to climb; and downstream consumption remained sluggish.

Overall, given the current low production and low inventory levels of rebar, coupled with a seasonal uptick in demand, there is potential for a certain degree of rebound in steel prices. Regarding the recent price decline, its depth and duration may be assessed from two dimensions: firstly, the extent of the price increase that needs to be retraced, stemming from previously falsified positive expectations; secondly, post-retracement, the actual timing of the crude steel output’s trough and subsequent recovery remains a key focus.