Under the influence of heavy rain in the south and high temperatures in the north, the steel market gradually entered the seasonal off-season, the recent steel demand has dropped significantly. The steel mill capacity is also expanding, and in mid-june the average daily output of crude steel hit a nearly decade high. In low demand and high production, steel social inventory for the second consecutive week of a recovery. As of July 3, according to the monitoring data, the social stock of steel in 29 key cities was 13.327 million tons, up 300,000 tons from last week, an increase of 2.3 percent, and 9.8 million tons lower than the peak of 23.127 million tons on March 13 this year, that was a 42.37 per cent fall, 2.834 m tonnes higher than the same period last year, or a 27.01 per cent increase. In fact, this is not the first rebound after the "14th consecutive decline" , as early as June 24, there was a small 0.6 million tons recovery. But with stocks picking up less sharply and demand delayed by about a month this year because of the epidemic, some believe the inventory turning point may not come so soon. But judging from this week's growth rate, it is almost certain that a seasonal pick-up in inventories has occurred. From the data, it can be seen that this year's decline in social inventories, although a delay from last year, but only delayed by two weeks. And Steel Social Inventory has not been fully digested, has been in a higher position; now there is a rebound, no doubt on the price of steel formed a greater pressure. This inventory growth in addition to seasonal off-season led to a reduction in steel demand, but also with the recent large increase in crude steel daily output. In mid-june 2020, the average daily output of crude steel was 2.142 million tons, up 1.57 percent from the previous month and 3.74 percent from the previous year, the highest in nearly a decade, according to the China Iron and Steel Association. At the same time, the operating rate of blast furnaces continues to climb. As of June 28, according to monitoring data, the operating rate of blast furnaces in major steel enterprises nationwide was 88% , an increase of 1.5 percentage points over the same period last month and an increase of 8 percentage points over the same period last year. Visible, the current blast furnace operating rate is particularly high, which also indicates that the late production will continue to rise. The Lange Steel Research Center estimates that in June, the country's crude steel daily production is expected to hit the 3 million-ton mark, of which 2.2 million tons will be hit by the average crude steel production of large and medium-sized steel enterprises. High inventory and high production, supply and demand pressure will continue to increase, the price of steel will also form a certain pressure. But the recent price of steel did not rise because of inventory and a significant decline in the trend. On the contrary, rebar futures in today's larger rise. As of July 3,2020, according to monitoring data, the average price of grade 3 rebar in 10 major cities in China was 3,685 yuan / ton, up 3 yuan / ton from the previous day. As of July 3, the previous period of rebar futures 2010 contract shocks rose to close at 3,619 yuan / ton, up 50 yuan / ton, or 1.4% , back to the 3600 yuan mark. The reason is still with the high prices of steel-making raw materials and the state to pull the economy to increase investment. According to monitoring data, as of July 3, the price of iron ore in Rizhao port was 780 yuan / ton, up 95 yuan / ton from the beginning of the year, up 13.87% . The price of steel scrap in Tangshan was 2,460 yuan / ton, up 270 yuan / ton from the low of 2,190 yuan / ton on April 8 this year, growth: 12.33. The rise in the price of raw materials has formed a strong support for steel prices, in addition, this year, China's rapid economic recovery, policy-making departments introduced a number of intensive counter-cyclical adjustment policies. Including successive"reduce standard", expand issue special debt, expand domestic demand, central approval and reply investment project. In the near future, special bonds will be issued to fight the epidemic, mainly for the construction of major infrastructure projects. And has recently issued the Xiongan new area construction special 2020 the second batch of central budget investment of 1.05 billion yuan to support Xiongan new area high-quality construction standards. This laid the foundation of the overall steel demand in the second half of the year, for the market confidence played a good role in promoting. Therefore, in the short term, in the absence of more positive or negative news, the domestic steel market in July is expected to show a weakening trend, but still pay attention to guard against risks.