China's steel spot market is facing a mixed outlook as supply remains steady with steel mills ramping up production capacity, driven by improved profits. However, demand has fluctuated due to seasonal weather shifts, transitioning from the traditional peak season to the off-season. Regional transactions varied in intensity, but overall demand remained robust compared to the pre-labor holiday period.
On the cost front, while iron ore prices dipped slightly, coke and scrap steel prices surged, maintaining support for production costs. Despite stable policy implementation and supply release, the market anticipates a volatile trend in the upcoming week (May 13-17, 2024).
The resilience of cost support may mitigate some effects, but uncertainties loom over China's steel sector. The demand side saw fluctuations as seasonal weather shifted the traditional peak season towards the off-season, potentially impacting regional transactions and overall demand levels.
While supply remained steady with steel mills continuing to ramp up production capacity buoyed by improved profits, the surge in coke and scrap steel prices, coupled with the anticipated volatile trend, could pose challenges for the Chinese steel market in the coming week.
