🔹 Market Recap

Yesterday, steel prices moved higher, driven by market speculation over potential environmental production cuts in Tangshan.

However, the situation remains highly uncertain, as two major industry sources released conflicting reports:

  • SteelHome (6:00 PM) reported that over half of integrated steel mills acknowledged receiving notifications regarding output restrictions, though no clear implementation plan has been issued.
  • Mysteel (10:00 PM), on the other hand, reported no signs of significant production cuts or unplanned maintenance among Hebei steel mills. Any ongoing maintenance is part of routine scheduling, unrelated to policy changes.

🔸 Interpretation
This divergence signals that Tangshan’s environmental measures remain unclear, and market participants are advised not to chase the rally. Take profits where appropriate and avoid impulsive operations.

🔹 Macro Policy Spotlight

A key development yesterday was the Central Financial and Economic Affairs Commission meeting — China’s top-level economic strategy body.
They emphasized the need to legally curb disordered low-price competition and to promote the orderly exit of outdated steel capacity.

This language has sparked speculation: Could this signal the start of another round of supply-side reform, similar to 2015–2016? If so, it could mark the emergence of a long-term bottom in the steel market.

🔸 Current Market View

While the industry fundamentals remain relatively balanced, recent price movements have been largely driven by external policy noise, not internal structural shifts.

Supportive policy signals have recently emerged, including:

  • Stable PMI readings
  • Land auction activity
  • Crackdowns on enforcement evasion
  • Supply-side reform discussions

As a result, bullish sentiment is currently dominating market tone.

🔹 Strategic Outlook

That said, the supply-demand balance has not fundamentally improved, and the broader downtrend remains intact. After the current rebound and short-term volatility, a renewed downward move is still the most probable scenario.

✅ Trading Recommendations:

  • Short on rallies, especially below the 3100 level for rebar
  • If going long, be cautious and quick to take profits

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