The meeting between China and the U.S. in Busan, South Korea concluded yesterday, resulting in four trade agreements — a development that should have been positive for the steel market. However, the market’s overall reaction remained weak.

Two main reasons explain this:

  1. Expectations were higher — the market had hoped for progress in agricultural and semiconductor trade, which was not achieved this time.
  2. Profit-taking sentiment — some participants believed that the bullish news was already priced in, prompting them to take profits.

Looking ahead, we expect a higher probability of price decline next week. The key factors include reduced hot metal output, increased mill maintenance, and downward pressure on raw materials. As raw material prices fall, steel prices are likely to follow.

Overall, the trading strategy remains unchanged — sell on rallies and maintain a short position bias.