Boosted by the news of nationwide overhaul and production restriction, the futures market rebounded sharply, and steel mills frequently raised their ex factory prices. This week, domestic construction steel prices rebounded in an all-round way. Although in the traditional off-season, steel prices rose against the trend. The main reasons are as follows: on the supply side, with the introduction of policies to reduce crude steel output in some provinces and cities, some steel enterprises started the production reduction plan, while the early market price fell, which forced some EAF steel to reduce output, resulting in a decrease in supply pressure; On the demand side, after the centennial celebration of the founding of the Communist Party of China, all parts of the country resumed work one after another, and the terminal demand picked up in stages. Under the two-way repair of supply and demand, the growth rate of domestic construction steel inventory slowed down this week. After entering the middle of July, the administrative and market-oriented efforts to limit production are expected to increase, and the market has strong expectations for the continuous decline of steel supply, but the basis of the current price surge is not firm: on the one hand, the social inventory is at a high level, which needs time for continuous digestion; On the other hand, with the increase of high temperature weather, it is difficult to continuously enlarge the terminal demand. At the same time, once the speculation mood cools down, the capital market will fluctuate, and the spot market will also be disturbed. It is worth noting that in the near future, the price of raw materials has been running at a high level, the imported ore has been soaring again, the coke and scrap are relatively resistant to decline, and the cost supports the steel mills to continue to support the price. Overall, with the dual boost of cost support and production restriction expectation, there is still room for the market to go up next week, but we also need to be alert to the price fluctuation caused by the rapid fall of demand. Considering all factors, we have a positive comment on the market next week - red warning: limited production, expected fermentation, strong price shock. Specifically, the steel index will run in the range of 5200-5350 yuan next week.