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1. Imbalance between supply and demand:
   • Insufficient demand:
     • Slowing macroeconomic growth: Global economic growth is slowing down. Especially in some major economies, industrial production activities are reduced, leading to a decline in demand for steel. For example, the development of the manufacturing industry in some countries has decelerated, and the purchase volume of steel has decreased. In China, the growth rates of most important indicators in the second quarter have mostly fallen. The external economic environment is complex and changeable, with increased instability and uncertainty, resulting in an impact on steel demand.
     • The continuous downturn in the real estate industry: Real estate development investment is still adjusting downward. New construction projects are reduced, and the demand for steel has dropped significantly. Real estate is an important consumption field of steel, and its insufficient demand has a greater impact on the steel market.
     • Slow progress of infrastructure projects: Although the issuance speed of special bonds has increased, after expanding the use, the part that actually reaches the workload has not increased, resulting in the demand for steel from infrastructure not meeting expectations.
     • Manufacturing orders are lukewarm: The recovery speed of manufacturing orders is slow, and enterprises are more cautious in purchasing steel.
   • Excess supply: When steel prices were high in the early stage, it stimulated the production enthusiasm of steel enterprises and increased production. In the case of declining demand, the problem of excess supply becomes more prominent.
2. Decline in raw material costs:
   • Iron ore prices fall: Iron ore is the main raw material for steel production. The price of iron ore on the international market has fallen, reducing the production cost of steel and putting downward pressure on steel prices.
   • Coke prices fall: Coke is also an important raw material for steel production. The decline in coke prices reduces the production cost of steel and promotes the fall of steel prices.
3. Changes in international trade environment:
   • Rising trade protectionism: The number of anti-dumping investigations on steel products in some countries has increased, raising the threshold for China’s steel exports and making exports more difficult, affecting the supply and demand balance of the domestic steel market.
   • Increased international market competition: The development of the steel industry in other countries has increased the supply of steel on the international market and formed competition for China’s steel exports, leading to increased pressure on the domestic market.
4. Market expectations and confidence factors:
   • Pessimistic market expectations: The market has a relatively pessimistic expectation for the future development of the steel industry. It is believed that demand is difficult to rebound significantly in the short term. This expectation leads traders and end users to be cautious in purchasing, further suppressing demand.
   • Lack of confidence: The continuous decline in steel prices has hit the confidence of market participants. Some enterprises choose to sell at a reduced price in order to withdraw funds and reduce inventory, exacerbating the price decline.
5. Impact of policy regulation: The government has introduced a series of policies to limit steel production capacity in order to control environmental pollution and overcapacity. These policies have affected the market supply and expectations to a certain extent.