Steel shows an upward trend

Steel prices fluctuated strongly this week. The national steel price index reported 5884 yuan/ton, an increase of 10 yuan/ton or 0.18% from last week.
The main divergence in the current market lies in demand expectations. Affected by real estate regulation, declining manufacturing export orders, epidemics and extreme weather, demand declined significantly from July to August, and demand fell by about 14% year-on-year in August; various macro data deviations were superimposed. In response to the emotional impact, the market has divergent expectations for later demand, which is also the main reason for the repeated fluctuations in current steel prices.

Although data on new real estate starts in August is poor, September-October is the best construction period in the second half of the year. The rush to construction period will stimulate real estate companies to accelerate construction and support the demand for steel in the peak season. On the whole, supply will shrink in the later period, demand will pick up from the previous month, fundamentals will improve, and prices will show an increase after consolidation.