Judging from the steel industry PMI investigated and released by the China Federation of Iron and Steel Logistics Professional Committee, it will be 48 in November 20232%, up 2 from the previous month6 percentage points, ending the operation of about 45% for three consecutive months, showing that the operation of the steel industry has stabilized in the short term.
More than sixty percent of losses, pessimism spread
According to the latest data, as of November 30, the profitability of 247 steel mills surveyed was 3939%, flat month-on-month, year-on-year increase of 1558 percentage points. Although the data has improved slightly, there are still 60% of steel mills facing losses.
The long-awaited "Golden Nine and Silver Ten" did not appear, but in November, there was a situation of various data picking up. The data shows that the domestic steel market demand performance and steel production have picked up in November. In November, raw material iron ore and coke are on the rise, the cost pressure of steel mills is rising, and under the dual effect of demand recovery and rising costs, steel products are on the rise, but due to the rising cost of raw materials, the problem of meager profits of steel mills has not been significantly improved.
*From the web for illustrative purposes only.
In the face of the loss of more than 6 steel enterprises, many steel companies expressed pessimism about the current situation.
Songting Iron and Steel issued a proposal saying that since the second half of 2023, the steel market has been strong in raw materials, and the price of finished steel has continued to declineThe whole industry has entered a state of large-scale losses, the "cold winter" of the steel industry ruthlessly crushes the living space of the steel enterprises, a new round of industry "reshuffle" has been quietly launched, and the wave of shutdown and closure, mergers and acquisitions has risen again。Songgang general manager saidThis steel "winter" cycle will be longer and more tragic
Shaanxi Longmen Iron and Steel also said that from the perspective of market development law,This cycle will be long, and the "cold" will be even worse than in 2015, and the survival of enterprises will once again be challenged。Real steelThe "cold winter" has just begun, and the competition will become more and more fierce in the future
Sheng Genghong, chairman of TISCO Group, pointed out when he went to Baosteel Desheng for investigation, ".This year's steel situation is very serious, and the outlook for next year is not necessarily clear。Li Shiping, Secretary of the Party Committee and Chairman of Zhongnan Iron and Steel, pointed out when investigating Chongqing Iron and Steel," he saidIt is necessary to have a clear understanding and rational treatment of the current situation in the steel industry
A large number of steel mills released maintenance information
In the face of the arrival of winter, nearly 20 domestic steel mills released maintenance information. Among them, Ninggang plans to overhaul the 1780mm hot rolling production line from December 5 to December 20, 2023, which will last about 10-15 days, and is expected to affect the total amount of about 180,000 tons20,000 tons.
December Steel Market**
On the demand side:
It is expected that in December, the demand for steel market will contract, and as the weather turns colder further, the fundamentals of steel demand will further decline. Real estate-related data is poor, indicating that in the short term, real estate support for the steel industry is still not optimistic, in the short term due to weather and other factors, demand has fallen, but in the long run, with the expansion of domestic demand, boost information and prevent risks and other measures to implement, there is still a good foundation for the improvement of steel demand.
Aspects:
With the advent of winter, the market demand has further declined, and the steel price has also declined due to the decline in demand. Superimposed on the current high inventory pressure, it will also have a certain impact on production, production weakened, but ** is still at a high level. In December, the steel social inventory is expected to bottom out, with the gradual deepening of the winter, the speed of destocking will gradually slow down, the inventory will gradually develop to the bottom of the construction stage, and enter the stage of accumulation around the end of the year.
Cost aspect:
Since November, iron ore has shown a strong operating trend. The intensity of "striking iron" has not decreased, the regulatory risk of iron ore is obvious, the upward resistance of mine prices is greater, and some steel mills have increased the centralized maintenance of blast furnaces, and the output of molten iron may continue to decline. The arrival volume of imported ore in December will rebound slightly compared with November. It is expected that the supply and demand of iron ore in December may be strong and weak. In this case, it is expected that the high level of raw materials in December is a high probability event, due to the decline in demand and the weakening of cost support, it is difficult for steel to maintain the current rapid upward momentum.
On the whole, the "weak reality" of the coming of the off-season in December has formed a certain constraint on the market, but the policy is expected to be released by the upcoming economic work conference or will form a confidence support, and the market is expected to show a strong trend in domestic steel prices in December under the favorable and bearish game.