In March, the crude steel output reached a new high, and the steel price in the second quarter or continued to decline.
in March, the crude steel output reached a new high, and the steel price in the second quarter or continued to decline.
China Construction Machinery Information
in March, the daily average crude steel output reached a new high.
according to the data released by the National Bureau of statistics on April 17, the national crude steel, pig iron and steel output in March were 72million tons, 62million tons and 96.76 million tons respectively, with a year-on-year increase of 1.8%, an increase of 1.3% and a decrease of 0.7%; Among them, the average daily output of crude steel reached 2322600 tons, a year-on-year increase of 6.42%, a record high. In the first quarter of this year, China's crude steel output was 201.1 million tons, a year-on-year increase of 4.6%
behind the record high daily average output in March and the year-on-year increase in output in the first quarter is the eagerness of iron and steel enterprises to increase production under the stimulation of high profits
since the second half of 2014, the iron and steel industry has fallen into the cold winter of the market with excess capacity, and the whole industry has suffered large losses. In this context, the supply side reform and de capacity of the steel industry were vigorously promoted, and the national steel enterprises exceeded the de capacity task by 65million tons last year. At the same time, due to the impact of infrastructure investment stimulus, PPP and credit easing at the beginning of last year, infrastructure, real estate, automobile and other downstream industries exploded in the second half of the year, driving the demand for steel. The upstream steel price also continued to rise. The average price of deformed steel bar increased by more than 100% from a low of 1800 yuan/ton at the end of 2015 to a high of 3800 yuan/ton at the end of 2016
under this rising trend, the profits of steel enterprises have been comprehensively improved. According to the previous performance forecast, only 4 of the 36 major steel listed companies have forecast losses, exceeding 90% of the forecast profits. Among them, 18 companies have a profit of more than 100million yuan. According to the statistics of CISA, in 2016, the member steel enterprises of CISA realized a total profit of 33.1 billion yuan, an increase of 110billion yuan compared with the loss of 80billion yuan in 2015
Lu Bin, content director of S & P global Platts Greater China, pointed out in an interview that since the beginning of this year, driven by the spring capital construction and downstream inventory replenishment, the steel price has continued to rise, while the profit level of steel enterprises has returned to the highest level in the past four years. Attracted by high profits, steel mills around the country have stepped up production. According to the data of Xiben Shinkansen, as of March 24, the blast furnace capacity utilization rate of 163 steel enterprises under investigation reached 83.86%, rising for two consecutive weeks; The operating rate of blast furnace was 76.52%, which also increased slightly month on month
at the same time, the further de capacity this year will also have an impact on the future market. According to the deployment of the national development and Reform Commission and the Ministry of industry and information technology, this year, the ministry level Federation of production capacity sent 12 steering groups to various places to supervise the regulation of local steel bars. Linnianxiu, deputy director of the national development and Reform Commission, once made it clear at the Council of CISA that "from the first half of this year to June 30, all localities must thoroughly clear the ground."
Lu Bin estimated: "we believe that this year, the production capacity of about 80million to 120million tons of ground bar steel may be eliminated." In addition, according to the relevant deployment of capacity reduction, 50million tons of capacity will be reduced this year on the basis of the over completion of 65million tons of capacity reduction last year
next, let's take a look at the standard configuration. "The great increase in profits brought about by the de capacity of the steel industry has also helped B introduce the application of belt puller to the development of 2B e-commerce." Wang Dong, CEO of B2B e-commerce looking for steel, said in an interview, "in 2016, looking for steel achieved comprehensive profits, with a revenue of about 36billion yuan and a net profit of tens of millions yuan. Looking for steel mall sold 13million tons of steel throughout the year and 103 cooperative steel plants."
talking about the market prospect this year, Wang Dong expressed optimism about the annual profit level of the steel industry. Wang Dong also stressed that B2B e-commerce platforms will play an active role in the supply side structural reform. "Because most of the strip mills do not have the formal Enterprise Qualification and cannot issue invoices, they will be excluded from the formal B2B platform at the entrance. When the market share of the formal enterprises becomes larger and larger, those strip mills will naturally be eliminated by the market."
steel prices may decline moderately in the second quarter.
since late March, steel prices have unexpectedly dropped from their highs in the traditional "Gold 3 silver 4" peak season. This deviates from the beautiful financial report and the first quarter forecast
in the spot market, the price of rebar in Shanghai fell by about 200 yuan/ton in a single week from April 10 to 14. According to the steel index app, from March 20 to April 18, the price index of grade III deformed steel bar continued to decline from 3750 yuan/ton to 3260 yuan/ton; In the futures market, the main rebar players fell below 3000 last week. On April 18, the main contract 1710 closed at 2825 yuan/ton, down 18% from the 3450 high in mid March
lixunlei, chief economist of Zhongtai securities, said in his official account article "terrible time lag": "since the low point at the end of 2015, the steel price has risen for more than a year. It must have accumulated a lot of inventory, and there is pressure to destock."
in lixunlei's opinion, as the transmission speed of economic activities between upstream and downstream, internal and external, and the basically paid use of plastic bags, there will be a "time lag effect". For example, after the 2008 financial crisis, China launched the 4trillion infrastructure investment stimulus policy, which will not be transmitted until 2011. Similarly, the growth rate of infrastructure investment picked up again in 2013. As a result, the continuous investment stimulus superimposed the factors of capacity removal, resulting in the rise in the prices of the means of production in the middle and upper reaches. The rise in steel prices since last year and the first quarter of this year is also one of the performances brought about by infrastructure investment and credit stimulus last year
different from some views that China's economy is expected to start a new cycle. According to lixunlei, due to the time lag factor, "what we are seeing at present may not be a fascinating prelude that makes its environmental protection benefits 10 points significant. 2016, which has passed, is likely to be the year with the greatest intensity of China's economic stimulus policies. This year, although there is a construction boom of the 'the Belt and Road' Forum and xiong'an new area, the growth rate of domestic infrastructure investment may not exceed that of last year."
"what we need to pay attention to is the potential risk of oversupply. Although domestic steel demand is still strong, it has not increased rapidly. If steel enterprises continue to increase production in large quantities, there will be downward pressure on steel prices." Lu Bin said
from the demand side, the real estate industry that has the greatest impact on steel demand is also undergoing great changes. Since last year, the tightening of real estate credit, the implementation of local purchase and sales restriction policies, and the decline in the growth rate of construction area for four consecutive months are affecting the industry's expectations of future steel supply and demand
it is found that since the middle of April, S & P global Platts, China Iron and steel, Xiben Shinkansen and other institutions believe that steel prices may still decline in the second quarter, but there is little room for decline, due to the small demand of traders and end users to replenish inventory, the slowing growth of downstream real estate infrastructure, the downturn of international steel prices and the decline of exports, as well as the elimination of production capacity, environmental supervision and other long and short factors
"June will be the deadline for clearing the capacity of all ground bar steels and non-conforming medium frequency furnaces and power frequency furnaces. If all localities can complete it on schedule, it will boost the steel market." Lihongmei, a senior analyst of S & P steel industry, believes that if the real estate regulation and environmental protection supervision can be implemented in strict accordance with the plan this year, it is believed that the steel price will enter a normal fluctuation track rather than a sharp rise and fall
"if the targets of clearing the ground bar steel and removing 50million tons of capacity this year are successfully completed, the market noise will be further reduced, and it is expected that the profitability of domestic steel enterprises will be maintained or further improved on the basis of 2016." Lihongmei said