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July's modest price recovery revealed deeper market fragility. While monthly gains provided tentative stabilization signals, the "weak rebound" pattern underscored persistent demand deficiencies. Transactions remained confined to essential low-price purchases, lacking volume-driven momentum. Fundamentally, insufficient demand continues to cap meaningful price recovery. This analysis examines price movements, inventory shifts, and supply-demand dynamics to forecast August's trajectory.
Current Benchmark: National average (108*4.5mm) at 4,330 RMB/ton
Monthly Movement: Up 82 RMB/ton
Annual Comparison: Down 324 RMB/ton from 2024
Raw Materials: Hot-rolled billet surged 158 RMB/ton monthly to 3,524 RMB/ton
Transaction Reality: Dominated by essential low-price purchases
Social Stocks: 695.4k tons (up 2.9k tons weekly)
Critical Metric: Inventory-to-sales ratio spiked to 51.39
Key Insight: Slow consumption pace drives ratio increase, not absolute oversupply
Risk Alert: Stocks manageable but vulnerable to prolonged demand weakness
Supply Discipline
Weekly output contracted to 331.4k tons (capacity utilization: 72.01%)
Mill inventories fell 17.7k tons, confirming effective production control
No near-term reversal signals in supply contraction
Demand Catalyst
July transactions plunged 17.44% weekly
Early August constrained by extreme weather in key regions
Policy lifeline: Accelerated $140B special bond funding from "counter-cyclical adjustments"
Turning point: Late-month demand recovery expected post-monsoon season
Supporting Factors
Sustained production discipline maintaining supply tightness
Infrastructure stimulus implementation in mid-to-late August
Seasonal weather improvement boosting construction efficiency
Oil/gas pipe exports showing +20% YoY resilience
Critical Risks
2-3 week lag in policy-to-project implementation
Downstream resistance above 4,400 RMB/ton price level
Iron ore volatility potentially weakening cost support
Projection: Moderately firm prices within 4350-4450 RMB/ton range
