🔹 Market Outlook & Core View

We expect the steel futures market to remain in a choppy or mildly bullish range this week. The following key factors are shaping the current landscape:

🔹 1. Core Driver: Geopolitical Risk & Crude Oil

Ongoing Middle East tensions have pushed crude oil prices higher, offering some support to steel pricing. This is currently the dominant narrative in market sentiment.

🔹 2. Fundamental Overview

  • Supply: Output remains high; no significant cuts in production.
  • Inventory: Still in a drawdown cycle, meaning no near-term inventory pressure.
  • Demand:
    • Noticeable weakness in hot-rolled coil and medium plate suggests manufacturing demand is cooling.
    • Real estate sector continues to drag, with new construction starts expected to decline further.
    • Seasonal demand slowdown will limit rebound potential.

🔹 3. Macro Policy Landscape

Domestic policy remains in stability-first mode, with markets now looking ahead to late-July Politburo meeting for potential stimulus signals. No major short-term boosts are expected before then.

🔹 4. Technical Perspective

Last week’s weekly candle on the RB2510 contract was a small-bodied red candlestick with both upper and lower wicks
(Upper shadow: 33 pts, Lower shadow: 29 pts, Real body: 6 pts).
It closed at 2969, down just 6 points from the previous week (-0.2%).
Volume increased, but open interest fell by 80,788 contracts, confirming a classic range-bound structure.

🔹 5. Basis Outlook

Current spot-futures basis remains elevated at one-year highs.
Far-month contracts outperform near-month ones, indicating a short-term rebound is still statistically supported.

🔸 Strategy Recommendation

Maintain a range-trading strategy, using 2950–3150 as the reference range (RB as example).
We remain medium-term bearish, and recommend selling rallies rather than chasing longs.

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