Whether the steel market can survive the winter smoothly this year, winter storage will become a key factor. After all, this is the window period for the last concentrated release of demand before the Spring Festival in 2023.
It is understood that this year’s winter storage is basically similar to last year’s winter storage: low inventory of raw materials, poor profitability of steel mills, and a pattern of “weak supply and demand” in fundamentals. The difference is that the center of gravity of steel prices this year has moved down significantly as a whole, and the social inventory of steel is at a historically low level.
Although winter storage has a certain room for operation this year, under the influence of sluggish demand and repeated epidemics, the enthusiasm of steel traders for winter storage is not high at present. The current steel price is still far from the psychological price of steel traders for winter storage . The author predicts that the winter storage window will not open in the short term, and it is expected to open around the end of December. The scale and intensity of winter storage this year are roughly the same as last year. In the absence of major positive news or preferential winter storage policies for steel companies, it is difficult to release more than expected winter storage demand this year.
However, under the condition of low inventory, the replenishment procurement demand brought by winter storage is still expected to drive a new round of “warm winter” market.
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