From the perspective of the domestic environment, China continues to introduce and implement national policies to consolidate the positive momentum of its economic recovery. These policies aim to achieve effective qualitative improvements and reasonable quantitative growth, strengthening the domestic economy.
On the supply side, domestic steel production enterprises are expected to release stable production capacity in September. As the demand for steel heats up with the arrival of the peak season and the implementation of leveling control policies, the production of steel is expected to experience slight fluctuations. September’s national crude steel production is projected to remain stable at around 2.8 million tons per day. However, in October, colder weather in the Northeast and the enforcement of production control policies in certain regions may cause a decline in daily crude steel production.
September witnessed improved weather conditions, leading to a recovery in construction steel demand and plate demand. As October is still the peak seasonal demand period, steel demand is expected to remain relatively high. Furthermore, the combined impact of favorable policies and increasing demand will contribute to the overall growth of the domestic steel market.
However, rising costs pose a challenge to steel companies. September saw a strengthening of average prices for iron ore and scrap steel, causing a significant increase in costs. As a result, the profitability of steel companies may show a contraction trend in October.
In summary, the domestic steel market in China is anticipated to navigate a complex and challenging external environment, with favorable domestic policies and increasing demand serving as catalysts for growth. The foundation for recovery still needs consolidation, and terminal demand is expected to unfold positively. With the combined influence of favorable policies, growing demand, shrinking supply, and rising costs, the domestic steel market is likely to experience a temporary decline followed by subsequent growth in October.
Despite challenges on the cost front, overall market conditions appear favorable for China’s steel sector. The continuous implementation of national policies and cumulative policy effects, coupled with recovering demand from the peak season, contribute to the positive outlook. The government’s efforts to drive economic recovery and promote qualitative improvements in the domestic steel market provide a solid foundation for future growth.
Post time: Oct-17-2023