🔹 Macro Perspective: Geopolitics, Inflation & Strategy

The recent de-escalation of the Iran–Israel conflict has shifted market sentiment rapidly. Former U.S. President Donald Trump’s strategic focus is now squarely on bringing down oil prices, for one critical reason:

Lower oil prices → Lower inflation → Federal Reserve rate cuts → Reduced U.S. debt servicing pressure.

In short, containing the Middle East conflict is now a necessity, not a choice. Trump’s message is clear:

“Everyone saves face and calms down — if you stir trouble again, expect consequences.”

🔹 Market Implication: Steel Price Drivers Shift Back to Fundamentals

With geopolitical risk fading, crude oil’s upward momentum is weakening, and its ability to support steel prices is significantly reduced.
As a result, market expectations are turning pessimistic again, and steel futures are returning to their fundamental supply-demand dynamics.

🔸 On the Demand Side:
The past two weeks have seen exceptionally weak demand, and pressure is building on mills as new orders decline. The temporary rebound in steel prices is likely over.

🔸 Near-Term Outlook:

  • Expect short-term consolidation, with a high probability of downside breakout once the market digests the ceasefire.
  • Supply-demand pressure will likely take center stage in shaping price movements.

🔹 Trading Strategy
We recommend initiating a short position on 10% of planned volume.
If a brief technical rebound occurs, it may serve as an opportunity to add to shorts in batches.

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