Market Context

📉 Impact of U.S. Tariffs:

  • Bullish sentiment dampened, limiting upside potential.
  • Prior target of 3450 now revised to 3400 due to policy shifts and weaker fundamentals.

Cost Analysis

⚖ Production Margins Tighten:

  • Electric Arc Furnace (EAF) cost: 3190 RMB/ton.
  • Blast Furnace (BF) profitability: Margins compressed, some BF mills operating at a loss.
  • Supply-side impact: EAF production likely to increase, while BF mills may cut output due to losses.

Market Outlook & Strategy

🔄 Short-Term Trend:

  • Volatility expected as BF mills limit production; prices likely to range between 3270-3350 before trending lower.
  • Downside move may not be smooth, given cost pressures on high-cost producers.

Trading Strategy Update:
✅ Shift to “Sell the Rally” – Favor short positions on strength.
❌ Buying dips is no longer advisable given market headwinds.
📊 Key levels to watch: Look for selling opportunities near 3350-3400.

📌 Daily insights provided by LangZo Steel. For reprints, please credit LangZo Steel.