In August, under the combined influence of strong expectations of steady growth policy measures, weak demand under the impact of typhoons and floods, and the relative resilience of raw material costs, the domestic steel market showed a downward trend after a downward trend.
Since August, because the market demand is still weak, the steel price shock is weak, the profit of steel enterprises has contracted, and the enthusiasm of enterprises to produce has been inhibited. From the change of blast furnace operating rate, the production release of iron and steel enterprises shows a high contraction trend.
From the perspective of the domestic environment, the current domestic economy as a whole has been stable and recovered, but it still faces problems such as pressure on foreign trade and slowing investment growth. From the perspective of macro policy, the macro counter-cyclical “combination” policy continues to increase, which is expected to drive the sustained recovery of the economy in the later period.
From the policy side of the steel industry, the state adheres to the combination of optimizing supply and expanding demand, coordinating the expansion of domestic demand and deepening supply-side structural reform, focusing on improving the quality and guarantee capacity of steel supply, and forming a higher level of dynamic balance in which demand pulls supply and supply creates demand.
From the supply side, due to the obvious contraction of variety profits and the common impact of the implementation of the production level control policy, the willingness of domestic steel production enterprises to release capacity has gradually weakened. In August, the national daily production of crude steel will remain at the level of about 2.9 million tons, showing year-on-year growth and continuing to fall. In September, with the implementation of production control policies in some areas, the daily output of crude steel will continue to fall.
From the demand side, the climate conditions in September greatly improved, construction projects will usher in the construction season, construction steel demand will have a significant recovery, manufacturing steel demand is still expected to release smoothly.
On the whole, the domestic steel market will show a pattern of “sustained economic recovery, off-season to peak season, effective policy landing, and gradual improvement in demand”. Driven by the steady growth policy and the strong demand release during the peak season, the domestic steel market may show a shock rebound in September.
From the cost side, the average price trend of iron ore, scrap steel and coke in August was differentiated, the cost side still maintained resilience, and the cost of steel production continued to move up. It is expected that the profit of steel enterprises in September will show a slight fluctuation trend, and some varieties of profit may change.
Post time: Sep-07-2023