Jan. 31, 2024

Analysis of steel price change factors in the domestic market

From the operation of the downstream steel industry, the domestic steel market into the off-season demand, but steel production fell sharply, exports continued to grow significantly, the inventory also remains low, steel prices still appear to pick up slightly.

1.manufacturing and infrastructure investment to maintain growth, real estate investment continued to decline.

  According to the National Bureau of Statistics, in 2023, the national fixed asset investment (excluding farm households) increased by 3.0% year-on-year. Among them, infrastructure investment grew by 5.9% year-on-year, accelerating by 0.1 percentage point from January-November 2023. Manufacturing investment increased by 6.5% year-on-year, accelerating by 0.2 percentage points from the January-November 2023 growth rate. Investment in real estate development fell by 9.6% year-on-year, of which the area of new housing construction fell by 20.4%, narrowing the rate of decline by 0.8 percentage points from January-November 2023.In December 2023, the value added of the nation's industries above designated size grew by 6.8% year-on-year in real terms, with the rate of growth up by 0.2 percentage points from that of November 2023.2023 Value-added of industry above scale grew by 4.6% year-on-year. From the overall situation, the real estate industry continued to decline, but the manufacturing industry and infrastructure to maintain growth, the domestic steel market supply and demand situation is basically stable.

  2. Apparent consumption declined.

  According to the National Bureau of Statistics, in December 2023, the national production of pig iron, crude steel and steel (including repeated material) was 60.87 million tons, 67.44 million tons and 108.5 million tons, down 11.8%, 14.9% and up 1.5% year-on-year, respectively; the average daily output of crude steel was 2.176 million tons, down 14.2% from a year earlier, maintaining a downward trend for the sixth consecutive month.2023 Cumulatively, China's pig iron, crude steel and steel production were 871.01 million tons, 101.908 million tons and 1362.68 million tons, up 0.7%, flat and up 5.2% respectively. Also according to the data released by the General Administration of Customs, in December 2023, the country exported 7.73 million tons of steel, a decrease of 3.5%; imports of steel 670,000 tons, an increase of 9.8%. 2023, the country's steel exports of 90.26 million tons, a year-on-year increase of 23.99 million tons, an increase of 36.2%; imports of 7.65 million tons of steel, a year-on-year decrease of 2.92 million tons, a decrease of 27.6%. After taking into account the import and export of steel billet, 2023 equivalent crude steel apparent consumption decreased by 3.5% year-on-year.

  3.raw fuel prices have increased.

  From the raw fuel point of view, according to the data released by the General Administration of Customs, in December 2023, the average price of imported iron ore (customs) was $ 123.26 / ton, up $ 6.1 / ton, or 5.21%, for three consecutive months of rise; the end of December 2023, the price of domestically produced iron ore concentrate continued to rise in the ring, or 4.03%, the prices of coking coal, metallurgical coke and steel scrap, respectively, rose in the ring rose 5.06%, 5.37% and 3.43%; blown coal prices remained stable on a year-over-year basis.