China's steel prices expected to continue to rise, boosted by macro expectations & policy stimulus
Time:Sat, 11 May 2024 09:38:48 +0800
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Following China's Labour Day, the initial rise in steel prices was largely influenced by macroeconomic expectations and sentiment, particularly evident in the surge of rebar contracts in April. While the rise exceeded 300 points, there is anticipation for further growth.
On a macro level, China's National Development and Reform Commission's discussions on large-scale equipment upgrades and trade-in programs for consumer goods are expected to bolster steel demand. Additionally, real estate promotion policies in certain cities are boosting market sentiment, albeit with limited short-term impact on steel demand.
Although policies like the "old-for-new" initiative are anticipated to take effect in the latter half of the year, raw material price hikes are impacting steel mill profits. While there's optimism regarding policy stimulus, the fundamentals of supply and demand remain relatively unchanged. Market confidence hinges on-demand release, with the potential for further steel price increases if demand surpasses expectations.
