Steel demand is coming.Can steel prices rise rapidly in May?

As of May, more than half of the first half of the year had passed. With the gradual fading of the new national outbreak of pneumonia, all walks of life have gradually resumed production and life and are on track. With the epidemic gradually fading and consumption gradually picking up, how should steel prices go?

First of all, from the perspective of demand, with the improvement of the epidemic situation and the arrival of the peak construction season, the operating rate of infrastructure and real estate projects in various regions has been significantly improved. With the rapid recovery of demand, both the recent social stocks of steel and in-plant stocks have declined. As of April 30, 2020, the social inventory of 29 key cities counted by Lange Steel Net was 16.872 million tons, a decrease of 1.15 million tons from the previous week, a decrease of 6.38%; after the "seven consecutive declines", the cumulative decrease was 625.5 10,000 tons, a decrease of 27.05%; it is still 5.655 million tons higher than the same period last year, an increase of 50.41%. It can be seen from the data that although the inventory has been continuously declining for seven weeks, it is still much higher than in previous years, and the demand for steel products in the later period is limited. Destocking will become a difficult task this year.

Wang Guoqing, director of the Lange Steel Research Center, said that since April, counter-cyclical adjustments have continued to increase, and trillions of special debt lines will be issued in advance. New and old infrastructure will continue to benefit and downstream demand for steel will continue to be released. However, the normality of high inventory and the release of production capacity will still form a large suppression on the later market, and the decline in the price of coke and iron ore will further weaken the role of cost in supporting later steel prices. It is expected that the domestic steel market will continue to fluctuate at the bottom in May.