Steel PMI recovers late in the steel market or stabilizes weakly
In October, under the general environment of manufacturing recovery, the steel industry finally ushered in a warm atmosphere. According to the latest data released by the Steel Logistics Professional Committee of the China Federation of Logistics and Purchasing, the domestic steel industry PMI (Manufacturing Purchasing Managers Index) was 52.7% in October, up 9.2 percentage points from the previous month, and the first return since April this year. Expansion interval. As the wind vane of the domestic steel industry prosperity index, Hebei Province's steel industry PMI also reached 52.5, a substantial increase of 14.7, the new orders index increased by 16.5.
China Steel Association said that with the gradual implementation of the country's "steady growth" measures, it is expected that steel consumption will improve in the later period, but it is still difficult to reverse the market pattern of overall supply exceeding demand. In order to curb the intensification of overcapacity, the China Iron and Steel Association has specifically called for domestic steel companies to continue to adhere to the operating principles of no contract, no production, no money, no sales, and no sales.
Market demand "to force"
According to data released by the China Federation of Logistics and Purchasing, China's PMI was 50.2% in October, up 0.4 percentage points from the previous month, and regaining 50% of the line. Among them, the raw material purchase price index, production index, and new order index have been “floating red”.
Driven by the recovery of the manufacturing industry, the performance of the steel industry is particularly eye-catching, and the long-lost steel market has finally recovered.
From the main sub-index, the new order index, the new export order index, and the purchase price index have returned to the expansion range. Among them, the new orders index of the steel industry rose sharply by 13.8 percentage points to 55.4%. According to the latest data from the China Iron and Steel Association, the average daily sales volume of 76 key steel companies in the middle of October reached 1.269 million tons, up 12% from the first ten days of October.
Demand boost is undoubtedly the main driver of the steel market recovery. October is still the traditional consumption season for the steel industry, and the domestic steel market demand remains at a high level. According to the monitoring data of the Nishimoto Shinkansen, the domestic terminal purchases in the lunar calendar increased by more than 3% in July compared with July, an increase of nearly 1% compared with the same period last year.
Under the national “steady growth” policy, the state has continuously accelerated the approval speed of infrastructure projects, and it has also provided strong support for the steel industry to “get rid of difficulties”. According to the National Bureau of Statistics, in the first three quarters of this year, China's infrastructure investment reached 3.877 billion yuan, a year-on-year increase of 10.2%, and the growth rate accelerated by 5.8 percentage points over the first half of the year; fixed assets investment reached 256.93 billion yuan, an increase of 20.5% over the same period of last year. The speed ratio rose by 0.3 percentage points from January to August.
From the demand of the steel industry, in September, the added value of industrial enterprises above designated size increased by 9.2% year-on-year, up 0.3 percentage points from August, which was the first increase after four consecutive months of decline, including general equipment, automobiles and communication electronic equipment. The industry has maintained rapid growth.
At the same time that steel demand rebounds, the international market demand is quite "powerful." In October, the new export orders index for the steel industry was 50.3%, up 7.6 percentage points from September. On the basis of a three-month rebound, the new steel export orders index has finally returned to the expansion range.
According to China Customs statistics, China exported 5.15 million tons of steel in September, an increase of 22.3% year-on-year and an increase of 910,000 tons. If it is converted into crude steel, China's net export of crude steel in September was 4.18 million tons, an increase of 38.1% year-on-year and an increase of 98%. Ten thousand tons.
Industry experts reminded that November is the low season of consumption in the steel industry. The northern market will enter a stage of shrinking seasonal demand. The steel consumption is bound to be affected. It is expected that the domestic steel market demand will fall back in November.
Steel production release during the off-season
Benefiting from the boost in demand, the steel industry's production index rebounded sharply in October, up 17.4 percentage points from September, reaching 57.1%. At the same time, procurement activities related to production activities also showed a significant upward trend.
Among them, the steel industry purchase volume index returned to the expansion range, reaching 53.5%, up 17% from the previous month; the raw material inventory index was 46.8%, although still in the contraction interval, but up 5.8 percentage points from September.
Judging from the changes in the above three indexes, with the stabilization of both ends of the market supply and demand, the enthusiasm of steel companies to resume production has increased significantly. Statistics show that the number of steel mills repairing blast furnaces is rapidly declining, and the loss-making steel mills account for only one-tenth of the total number of steel mills. According to the statistics of China Iron and Steel Association, the average daily crude steel output in the middle of October reached 2,900 tons, reaching 1,999,200 tons, up 4.33% from the first ten days of October, and 7.7% from mid-September. The output reached 1,606,100 tons, an increase of 1.42% from the first ten days of October.
He Rongliang, a steel researcher at the China Merchants Productivity Promotion Center, believes that after October of each year, the national steel output will fall seasonally with the arrival of winter, but in September and October this year, the government accelerated the pace of investment approval for domestic steel production. Increased confidence, the company's operating rate kept rising, and steel production capacity was released in the off-season.
It is worth noting that the steel industry's finished goods inventory index was 48.4% in October, still in the contraction zone, and the current steel market inventory pressure continued to ease. According to the latest statistics, as of October 26, the social stocks of five major steel products, including rebar, wire rod, plate, cold-rolled coil and hot-rolled coil, were 12.432 million tons, the lowest level since 2010. It was down by 274,000 tons from the previous week and fell for the third consecutive week, but the decline was significantly smaller than the previous week and was 1.91 million tons less than the same period last year.
Some experts in the industry have warned that as steel mills resume their resumption of production, the resistance to inventory declines may increase in the later period, and it is not ruled out that the total inventory will “slow back and rise”.
According to the statistics of China Steel Association, the inventory of key steel enterprises has rebounded in mid-October. Steel inventories of 76 key steel companies reached 11.04 million tons, up 2.43% from the first half of October. As of November 2, the national rebar social inventories were 4,927,300 tons, an increase of 27,600 tons compared with October 26. After nearly 20 weeks of continuous decline, the rebar social inventories showed a slight rebound.
Late steel prices may be weaker
In the context of the stabilization of the domestic economy, steel prices have rebounded slightly since mid-September, and prices of long products and plates have risen.
At the end of September, China Steel Industry Association's comprehensive steel price index was 102.45 points, up 0.92 points month-on-month, or 0.91%, the first time after four consecutive months of decline. Among them, the long product index was 105.94 points, up 0.92 points from the previous month, an increase of 0.88%; the plate index was 100.08 points, up 1.5 points from the previous month, an increase of 1.52%. From the main varieties, rebar prices rebounded most obviously, up 2.85% in September; high-line, medium-thick plate, and hot-rolled coil prices rose 1.65%, 1.18% and 1.69% respectively.
In the traditional consumption season, the growth rate of steel industry mainly rebounded, steel exports increased, social inventories dropped significantly, and the state increased investment approval, which was an important incentive for steel prices to stabilize and rebound.
However, can the steel market recover, or is it just a flash in the pan? The industry is still quite cautious.
With the implementation of various “steady growth” policies and measures in China, the successive start of large-scale infrastructure projects is undoubtedly the main positive for boosting the steel market. Since September, the National Development and Reform Commission has successively approved 25 urban rails, 13 highway constructions, 10 municipal projects and 7 ports and waterway projects with a total investment of more than 1 trillion yuan. The recently introduced railway infrastructure investment plan during the “Twelfth Five-Year Plan” period reached 2.3 trillion yuan, exceeding the actual completion of the “Eleventh Five-Year Plan” by RMB 32 million. In September, the national railway infrastructure investment exceeded RMB 64.2 billion, a year-on-year increase of 111%. Growth of 63%.
Sinosteel reminded that the rebound in steel prices since September was mainly due to the country's macroeconomic policies, enterprises controlling production, and increasing market confidence. However, due to the excessive domestic steel production capacity, the contradiction between oversupply of steel products has existed for a long time. It is expected that steel prices will continue to show low fluctuations in the later period.
Wang Guoqing, director of the Lange Steel Information Research Center, told reporters that under the intertwined factors of seasonal factors, market confidence, procurement costs, financing environment, etc., domestic steel prices in November will be stable, and there may be a slight decline. . According to the monitoring data of the five major steel products in ten cities by Lange Steel Information Research Center, as of October 31, the price of 6.5mm high line was 3708 yuan/ton, up 43 yuan from the end of last month; 25mm third-grade rebar price It was 3,865 yuan, up 86 yuan; 5.5mm hot rolled coil price was 3,759 yuan, up 150 yuan; 1mm cold rolled coil price was 4,516 yuan, up 68 yuan; 20mm plate price was 3,646 yuan, up 73 yuan.