Recent breakthroughs in US-China trade have boosted market confidence. China's steel sector is showing signs of recovery. Although weak demand after the May Day holiday has pushed inventories slightly higher, overall stock levels remain low, preserving price flexibility. However, downstream sectors, particularly construction, have yet to show significant improvement. The real estate market is stabilizing, but actual steel demand remains limited, and infrastructure investment growth is slow.

As the steel market enters a traditional off-season, downstream demand is expected to stay weak. With no clear recovery in supply or demand, cost-side support is now playing a key role in limiting further price declines.