Posted on 23 Jul 2024
Recently, iron ore and nickel inventory levels have simultaneously surged, and macroeconomic factors have worsened, particularly with the potential delay in the Federal Reserve's rate cuts, adding more uncertainty to the steel market's Q4 peak season rebound.
Last week's steel market was further impacted by two major macro factors. Firstly, after China's Third Plenary Session, no major stimulus measures were announced, which hit market confidence. Secondly, despite Trump's increased election odds following a shooting incident, he stated that he does not want a rate cut before the election, suggesting that December is the earliest possible time for such a move.
Furthermore, increased shipments from miners have led to a surge in iron ore arriving in China, pushing port inventories close to historical highs. Meanwhile, nickel inventories in London Metal Exchange (LME) broke through the 100,000-ton mark last week, reaching a new high in over two and a half years, indicating persistently high raw material inventories.
Market participants indicate that there is continued weak seasonal demand and weakened support from raw material prices. Even though Q4 is traditionally a peak season, the potential delay in the Fed's rate cuts means the US dollar will remain strong, making it uncertain about the steel market before the end of the year.
Source:Yieh
