Chinese New Year Holiday Slows Down the Steel Market
Release time: 2025-01-23Views: 0

As of January 15, 2025, 126 blast furnaces at 81 steel mills among 201 national production enterprises were under maintenance and shut down. The total volume is 135,580 cubic meters, an increase of 9,300 cubic meters compared with the previous week.This has led to major steel enterprises’blast furnace operating rate dropping to 74.6%, a week-on-week decrease of 0.86%. With the Spring Festival holiday approaching, market transactions have come to a standstill. Although steel prices rose last week, the driving force for future steel prices was insufficient. Today, the trading volume decreased and the price fell back.

image.png

Image Source: 699pic.com

The closing prices of the main rebar and hot-rolled coil contracts moved slightly downward. Rebar prices in most cities remained stable, while in a few regions such as Nanjing and Jinan, they increased by 10 - 30 yuan/ton. The ex-factory tax - inclusive price of ordinary square billets in Qian'an, Tangshan, was lowered to 3,080 yuan. Nevertheless, thanks to the better-than-expected GDP recovery in the fourth quarter and positive macro-policies, market confidence has been somewhat boosted, and there are signs of a steel price rebound.

However, with only 5 trading days left before the Spring Festival, most steel traders have suspended business. Market demand continues to shrink, presenting a situation of nominal prices but no actual transactions. The low production and low inventory of steel have alleviated the negative feedback pressure on the market. Moreover, end-user demand is weak, and the willingness to stockpile for winter is low. In terms of raw materials, the prices of iron ore and the "double cokes" (coking coal and coke) are facing correction and restoration, and the cost support has weakened. Technically, after the rise in steel prices, there is a downward pressure on correction. It is expected that steel prices will move within a box in the short term, and attention should be paid to the support level below.

Overall, the approaching Spring Festival holiday has further weakened the demand in the steel market. The spot market is likely to remain in a consolidation trend before the festival, while the probability of replenishment after the festival increases. For steel traders, it is recommended to adjust their positions appropriately according to their own inventory levels to cope with possible price corrections. In the long run, the domestic economic recovery and policy support will be beneficial to the steel market.

Previous
Next