Tianjin benchmark lifted 65 cents to $68.75. Paper fell overnight. Rebar inventories fell again last week but remains well above the lows of last year. CISA daily steel output is trending down solidly.
Steel prices have clearly responded to easing Chinese monetary policy. But there is nothing here out of the ordinary yet in terms of seasonal behaviour. Nor has my outlook changed for this year. I still expect to see strength for a few months followed by material weakness heading into Q4 as the seasonal destocking takes over, exacerbated by Winter shutdowns.
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Next year’s outlook is firming as China rolls out the stimulus. But first we must cross the valley.
