In September, under the joint influence of factors such as the strong guidance of the effective landing of the policy combination, the strong promotion of the support of raw material costs, and the weak reality of insufficient demand in the peak season, the domestic steel market showed a stage shock rebound. For steel mills, due to the shock rebound of steel prices and the relative toughness of raw material cost support, steel mill profits continue to improve. According to the statistics of the China Iron and Steel Association, large and medium-sized steel enterprises made a profit of 16 billion yuan in the first quarter, a profit of 17 billion yuan in the second quarter, and a profit of 29.1 billion yuan in the third quarter, whether the steel industry or key steel enterprises have achieved a trend of walking out of the loss quagmire and toward the dawn of profit.
In September, the production of construction steel varieties showed a significant decline year-on-year; The output of plate varieties showed a significant increase year-on-year, the output of pipe varieties showed a slight increase year-on-year, and from the sequential point of view, the output of these three varieties has risen and fallen, which indicates that the structural differences in downstream demand are still obvious, and the downstream demand of varieties is uneven.
Due to the combined impact of multiple factors such as the severe and complex international environment, the continued recovery of the domestic economy, the effective landing of early policies, the poor effect of steel production reduction, lower downstream demand than expected, and the resilience of raw material costs, the domestic steel market as a whole showed a trend of resistance decline in October, and was accompanied by a staged rebound. Steel production enterprises are still facing the difficulties of high raw material costs and insufficient structural demand, but under the efforts of steel enterprises to continuously reduce costs and increase efficiency and product improvement, the profitability and profit level of steel enterprises have been continuously improved. According to the data of the National Bureau of Statistics, due to the common impact of the implementation of the production level control policy and the increase of loss pressure, the production capacity release rhythm of large and medium-sized steel production enterprises began to slow down gradually, showing a month-by-month production reduction trend.
In the short term, the domestic steel market gradually began to shift to the traditional off-season, the overall market is affected by multiple factors, the conflict in the Middle East is heating up rapidly, the interest rate hike in Europe and the United States will be suspended, the domestic economy is recovering, the production supply is steadily increasing, the development quality is steadily improving, the accumulation of positive factors is increasing, the domestic demand is still insufficient, the recovery foundation still needs to be consolidated, and the trillion national debt suddenly dropped. Multiple policies to stabilize the economy, the traditional peak season to the off-season, steel production control policy, environmental protection and energy consumption dual control, supply and demand improvement and other factors will affect the trend of the market.
From the situation faced by steel enterprises since this year, there are obvious structural contradictions between supply and demand, under the suppression of dual-carbon strategy and peaceful control policy, the supply side shows obvious characteristics of the top platform, while the demand side shows the characteristics of overall lack of demand and structural demand differentiation in the transformation of dual-cycle strategy and demand structure. This makes the steel industry may enter a new reduction cycle, during which the supply and demand structure adjustment will become the “focus”. Therefore, steel production enterprises should aim at the direction of “looking at the long-term, looking for the future, light scale, heavy structure”, adapt to demand, take the initiative, accelerate iteration, and promote the high-quality development of the steel industry from their own start.
Post time: Oct-31-2023