China Steel Weekly: Demand diverges, supply shrinks, iron ore shipments fall, short-term inventories are key (Morgan Stanley)

2026-07-18·ima-daily5min-0718-45-b50670c24c

Street Signal | China Steel Weekly: Demand diverges, supply shrinks, iron ore shipments fall, short-term inventories are key (Morgan Stanley)

Morgan Stanley's weekly data showed that apparent consumption of long products increased by 3.6% week-on-week, while flat products fell by 0.4%; output of both types of products fell; traders' inventories fell and electric furnace utilization declined.

On the supply side, iron ore shipments from Australia and Pakistan decreased by 2.29 million tons week-on-week. This weekly report provides the most microscopic changes in industry supply and demand.

The market's focus on steel may be due to the expected boost from macro policies, but micro data shows that demand is diverging in reality, and supply has begun to adjust and shrink spontaneously.

One sentence conclusion: Trading in the steel sector is switching from macro "policy expectations" back to micro "inventory and production data." The decline in inventories and the contraction of supply are the most real support for short-term prices, rather than empty talk about policies.

Good/bad: It will support steel prices in the short term and is good for steel companies with a healthy inventory structure. However, the pattern of demand differentiation has not changed. Market expectations for policy may have masked real signals of improvement in supply and demand. Catalysts:

1) Inventory, production and consumption data for the next week to determine whether the trend can be sustained;

2) Changes in blast furnace and electric furnace operating rates are a bellwether for supply adjustments.

Full text

China Steel Weekly: Demand diverges, supply shrinks, iron ore shipments fall, short-term inventories are key (Morgan Stanley)

Morgan Stanley's weekly data showed that apparent consumption of long products increased by 3.6% week-on-week, while flat products fell by 0.4%; output of both types of products fell; traders' inventories fell and electric furnace utilization declined. On the supply side, iron ore shipments from Australia and Pakistan decreased by 2.29 million tons week-on-week. This weekly report provides the most microscopic changes in industry supply and demand. The market's focus on steel may be due to the expected boost from macro policies, but micro data shows that demand is diverging in reality, and supply has begun to adjust and shrink spontaneously. One sentence conclusion: Trading in the steel sector is switching from macro "policy expectations" back to micro "inventory and production data." The decline in inventories and the contraction of supply are the most real support for short-term prices, rather than empty talk about policies. Good/bad: It will support steel prices in the short term and is good for steel companies with a healthy inventory structure. However, the pattern of demand differentiation has not changed. Market expectations for policy may have masked real signals of improvement in supply and demand. Catalysts: 1) Inventory, production and consumption data for the next week to determine whether the trend can be sustained; 2) Changes in blast furnace and electric furnace operating rates are a bellwether for supply adjustments.