In terms of the macro situation: In July, the manufacturing PMI of China was 49.3%, a decrease of 0.4 percentage points from the previous month; the business activity index of the construction industry was 50.6%, a drop of 2.2 percentage points from the previous month. Due to weather factors such as high temperatures and heavy rain, July entered a production off-season, and the production and operation activities of the manufacturing and construction industries slowed down.
On the supply side: According to Mysteel's research, the output of five major steel products this week was 8.6742 million tons, Carbon Steel Coil；Alloy Steel Coil；Mild Steel Coilan increase of 0.0045 million tons compared with the previous week. Among them, the output of rebar, wire rod and medium and heavy plates decreased, while the output of hot-rolled coil and cold-rolled coil increased.
In terms of inventory: The total inventory of the five major types of steel this week was 13.5189 million tons, an increase of 153,900 tons compared with the previous week. Among them, the inventory of steel mills was 4.0952 million tons, an increase of 10,000 tons compared with the previous week; the social inventory was 9.4237 million tons, an increase of 152,900 tons compared with the previous week.
Although the futures of coking coal and coke have been rising continuously in the early stage, which once stimulated the speculative demand in the steel market to be active, the demand in the off-season is difficult to improve continuously and may return to a weak state later. Meanwhile, the profits of steel mills have risen significantly recently, and the output is hard to be reduced. It is expected that the supply and demand pressure will increase later and the inventory reduction will be blocked. Besides, with the fading of the market's speculative sentiment, the short-term steel price may fall weakly.