The demand release will be the main factor to support API 5L X42 steel market

At present, China's domestic steel demand is gradually entering the peak season, and the construction of major investment projects approved by the state in the early stage has started; and this year is the 100th anniversary of the founding of the Communist Party of China. Due to the epidemic situation before the Spring Festival, the construction period of some construction sites has been delayed, and now the downstream construction sites may have a phased rush. In foreign countries, with the gradual improvement of the global new crown epidemic, many countries have introduced loose monetary policies, and inflation expectations are strong, which will promote the rise of commodity prices. In addition, the pace of economic recovery in various countries has accelerated. Recently, China's domestic manufacturing industry has grown significantly, and the overall state of production is at full capacity, which has driven the long-term and stable demand for API 5L X42 and other sheet materials. Therefore, it has also pushed up market sentiment.

All in all, with the gradual recovery of demand, inventory has also decreased significantly, and the decline rate is accelerating. On March 26, the social inventory of API 5L X42 and other steel products was 17.99 million tons, a decrease of 1.023 million tons or 5.38% compared with the previous week, and the decline rate was 2.29 percentage points faster than the previous week. In the future, the release of the demand side will be the main factor in the progress and intensity of the upward restoration of materials such as API 5L X42.