How is the steel trend in the near future?

The China Iron and Steel Association released a set of latest data. The data shows that in late March 2022, key statistics iron and steel enterprises produced a total of 23.7611 million tons of crude steel, 20.4451 million tons of pig iron, and 23.2833 million tons of steel. Among them, the daily output of crude steel was 2.1601 million tons, an increase of 5.41% from the previous month; the daily output of pig iron was 1.8586 million tons, an increase of 3.47% from the previous month; the daily output of steel was 2.1167 million tons, an increase of 5.18% from the previous month. At the end of the ten-day period, the steel inventory was 16.6199 million tons, a decrease of 504,900 tons or 2.95% from the previous ten-day. An increase of 519,300 tons over the end of last month, an increase of 3.23%. Compared with the beginning of the year, it increased by 5.3231 million tons, an increase of 47.12%; compared with the same period last year, it increased by 1.9132 million tons, an increase of 13.01%.
Behind these data, there are changes in the domestic steel market supply and demand, which have a great impact on the later steel price trend.
1. Compare the daily output data of crude steel and steel products of key iron and steel enterprises in March in the past four years:
In 2019, the daily output of crude steel was 2.591 million tons and the daily output of steel was 3.157 million tons;
In 2020, the daily output of crude steel will be 2.548 million tons and the daily output of steel will be 3.190 million tons;
In 2021, the daily output of crude steel will be 3.033 million tons and the daily output of steel will be 3.867 million tons;
In 2022, the daily output of crude steel will be 2.161 million tons and the daily output of steel will be 2.117 million tons (data in the second half of the year).
Found what? After rising for three consecutive years in March, the daily output of steel fell sharply in late March this year. In fact, the daily output of steel in March this year also fell sharply compared with previous years.
What does it say? Due to the impact of the epidemic on the normal operation of steel plants and the transportation of steel raw materials, the operating rate of steel plants is insufficient, resulting in a significant reduction in the supply of steel in March 2022.
Second, look at the chain data of crude steel and steel daily output, the chain comparison is the comparison with the previous statistical cycle:
In late March 2022, the daily output of crude steel was 2.1601 million tons, a month-on-month increase of 5.41%; the daily output of pig iron was 1.8586 million tons, a month-on-month increase of 3.47%; the daily steel output was 2.1167 million tons, a month-on-month increase of 5.18%.
What does it say? Steel mills are gradually resuming production. Due to the low base of the previous value, this set of month-on-month data shows that the speed of resumption of work and production in steel mills is not very fast, and the supply side is still in a tight state.
3. Finally, let’s study the steel inventory data in March. The inventory data indirectly reflects the current sales of the steel market:
At the end of the first ten days, the steel inventory was 16.6199 million tons, an increase of 519,300 tons or 3.23% over the end of last month; an increase of 5.3231 million tons or 47.12% over the beginning of the year; an increase of 1.9132 million tons over the same period last year, an increase of 13.01%.
What does it say? March every year should be the fastest period of destocking in the whole year, and the destocking data in March this year is very unsatisfactory, mainly because the epidemic has seriously affected the steel demand of downstream enterprises.
Through the analysis of the above three aspects, we have obtained the following basic judgments: First, the supply of steel in March this year was greatly reduced compared with previous years, and the pressure on the supply side of the market was less; Tight state; third, the demand for downstream steel is very unsatisfactory, which can be said to be very sluggish.


Post time: Apr-13-2022