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Throughout the year, the center of gravity shifted downward and the amplitude narrowed.
The first stage - January to mid-March: peaking, strong economic development expectations + high exports drive *** peaking;
The second stage - mid-March to the end of May: negative feedback, overseas recession expectations intensified, domestic peak season expectations falsified, bifocal imports recovered, supply pressure increased significantly, and the collapse of carbon over-falling costs triggered a negative feedback stage
The third stage - from early June to late October: ** bottoming, the depreciation of the RMB is conducive to a sharp increase in exports, the resilience of domestic demand in the off-season still exists, the crude steel pressure is expected to rise again but the steel mills are slow to reduce production, the profits of steel mills are poor, and the raw materials lead the rise in finished products;
The fourth stage - late October to the end of the year: strong expectations, high costs, macro policies continue to increase, increase the issuance of national bonds, increase the fiscal deficit, support real estate financing to resolve local debts, at the same time China and the United States temporarily eased, the decline of hot metal is lower than expected, steel mill profits repair, low raw materials inventory and high demand;
2. Supply side
The total output of construction steel in East China fell slightly.
In 2023, the output of construction steel in East China will be 94.78 million tons, a decrease of 2% from 2022;Jiangsu Province increased by 3% month-on-month, Zhejiang decreased by 13% month-on-month, Anhui increased by 7%, Jiangxi increased by 15%, and Shandong decreased by 29% month-on-month.
In 2023, construction steel in East China will account for 45% in Jiangsu, further expanding by 1 percentage point compared with 2022, 4% in Zhejiang, down 1 percentage point from the previous month, 19% in Anhui, increasing by 1 percentage point from the previous month, 16% in Jiangxi with 2 percentage points from the previous month, and 15% from Shandong with a decrease of 6 percentage points from the previous month
Up to now, the total inventory of rebar in East China in 2023 is 294760,000 tons, a decrease of 9% year-on-year in 2022, an increase of 10% year-on-year in 2021, and a post-holiday inventory high of 600 in 2023630,000 tons, down 8% year-on-year in 2022, and the slope of decline in the second half of the year was slightly higher than in 2022 but lower than in 2021;
In the past three years, the proportion of rebar inventory in the five major products has gradually decreased, 51%, 18%, 47%, and hot-rolled coils and medium and heavy plates have increased month-on-month thanks to the increase in external demand and profits
Requirements:
Domestic demand is high and then low, and exports continue to be strong.
As of now, in the 51st week of 2023, the apparent consumption of domestic construction steel is 237990,000 tons, down 10% year-on-year in 2022 and 11% down from 2021;From the perspective of seasonal trends, the average consumption of traditional gold and silver in 2023 will increase by 10% year-on-year compared with 2022, and the average consumption of gold nine and silver ten will decrease by 11% year-on-year, and the apparent consumption in the first half of the year will slightly exceed that of 2022, and it will weaken significantly in the second half of the year;
From January to November 2023, the total domestic steel export volume will be 826580,000 tons, an increase of 33% year-on-year in 2022;In 2023, exports will increase by 35% year-on-year on average, maintaining a positive growth rate throughout the year, and it is estimated that the annual growth rate will reach 90 million
Outlook:
On the demand side, infrastructure supports the stability of real estate.
In 2023, the main performance is that infrastructure will remain strong and resilient, but it will also be dragged down by the ** debt crisis, coupled with the sharp decline in local land revenue, and new infrastructure investment will inevitably be affectedIn terms of real estate, the performance of completion is very bright, under the continuous increase in the financial policy of "guaranteed delivery", the positive effect is remarkable, and at the same time, the sales are also in various places to relax the purchase restrictions, reduce the proportion of down payment, reduce loan interest and so on under the real estate relaxation policy has been a stage of "Xiaoyangchun" but the good times are not long, the purchasing power of residents has not been continuously improved, the sales pressure still exists, and the return of funds from real estate enterprises is still poor, and even if there are "three not less than" policies proposed, at the same time, it is also "real estate financing white list" With the blessing of real estate enterprises, there are expectations and space for improvement on the financing side of real estate enterprises, but the short-term implementation still needs further observation. Looking forward to 2024, the core of real estate is mainly stable, or plus** forecast, using the policy toolbox, continuous optimization of fiscal policy on the one hand to further resolve the pressure of local debt, release the incremental space of infrastructure, on the other hand, and a number of targeted favorable policies under the landing, real estate sales are expected to usher in a certain improvement, at the same time, the financing of the head of real estate enterprises is difficult to get a certain pressure, on the whole, in 2024 with the support of a number of positive policies, infrastructure still has a certain incremental space, and the room in " In the process of the gradual implementation of the three major projects, it is bound to give a certain degree of positive improvement to the demand for steel.
Supply side - the supply has room for adjustment, and the pressure is released slowly.
When the East China steel mills are on the verge of profit and loss, most domestic steel companies may have fallen into a loss situation, and the profits of steel mills are mainly received from iron ore, and the average monthly molten iron of domestic blast furnace steel mills in 2023 will be 2.39 million tons, an increase of 5% over 2022 and an increase of 4% over 2021 In 2023, the average monthly value of imported ore in the plant will be 90.09 million tons, down 12% from 2022 and 19% from 2021
The low inventory of high-speed iron water makes the elasticity of each wave of raw materials far ahead of the finished products, and the profits of steel mills have been repeatedly erodedThe output of molten iron is high, the output of thread is low, combined with the strong export of industrial materials and the relative advantage of profits, so it is difficult for steel mills to have a large space for increasing production due to profit constraints
Summary
Looking forward to 2024, the overall macro environment is still warm, the fiscal policy may continue to be positive, and the expectation of an upturn in the economy still existsOn the supply side, the administrative reduction is expected to be weak, and the production is mainly based on profit adjustment, with the increase in the export of other varieties of materials and profit advantages, the output of rebar may further decline, and the overall pressure needs to be alleviatedOn the demand side, with the use of active fiscal policy tools, the pressure on local bonds has eased, the incremental space for infrastructure construction can be considered, real estate investment may improve, and there is room for continued repair of the pressure on existing house sales, but the increase in new construction still needs to pay attention to the implementation of the "three major real estate projects", and the overall real estate demand may show regional differentiation, and the total amount will decline slightlyIn terms of efficiency, the main operating logic may still be supported by costs, and the overall profits of steel mills are still low, but the differentiation of varieties and profits has intensified, and the overall center of gravity has moved upwards and the amplitude has expanded.
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