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It is expected that domestic steel supply and demand will increase in the second quarter, but demand will be weak.
“Since the beginning of this year, China's steel production has maintained a rapid recovery. From January to March, the crude steel output was 261.56 million tons, a year-on-year increase of 6.1%; the pig iron output was 219.83 million tons, a year-on-year increase of 7.6%; the steel output was 332.59 million tons, a year-on-year increase of 5.8%. Among them, in March, the average daily crude steel output was 3.0881 million tons, which hit a new high in the same period over the years.” Liu Xinwei, a senior researcher at Zhuochuang Information Research Institute and a member of the CSPI Index Expert Committee of China Iron and Steel Association, said.
“Since the beginning of this year, the production level of the steel industry has continued to improve, of which exports have maintained a high level. From January to March, China exported a total of 20.08 million tons of steel, a year-on-year increase of 53.2%. China imported a total of 1.91 million tons of steel, a year-on-year decrease of 40.5%. In March, the average export price of steel was 1,294.2 US dollars per ton, an increase of 16.8% sequentially. The average import price of steel was 1,661 US dollars per ton, a decrease of 7.9% sequentially. The price difference between import and export has narrowed.” Shi Huien, director of the Metallurgical Industry Economic Development Research Center, said.
Shi Huien expects that steel demand will remain stable and declining during the "14th Five-Year Plan" period, or remain at about 1 billion tons, and the western region will become a new growth point for steel consumption. At the same time, he believes that during the "14th Five-Year Plan" period, the supply-side structural reform of the steel industry will continue to deepen, scientific and technological innovation will drive high-quality development, and green and low-carbon development will become an inevitable choice to accelerate the transformation of digital intelligence and enhance the level of modernization of the industrial chain.
"In January, the economic recovery boosted market confidence, and steel prices continued to rise. The demand release in February went from weak to strong. The steel market first fell and then rose, and prices fluctuated and rose. In March, domestic steel production increased rapidly, and prices rose first and then fell. After the market stabilized at the end of March, the prices of some varieties rebounded slightly. Overall, the domestic steel market showed a volatile upward trend in the first quarter." Qi Jianfeng, a senior marketer in the Marketing Management Department of Shandong Iron and Steel Co., Ltd. (Marketing Corporation), said.
For the later market, Qi Jianfeng believes that due to factors such as overseas uncertainties, continuous decline in raw material inventory, and differentiation in downstream demand trends, it is expected that supply and demand will increase in the second quarter but demand will show a weak trend, and the market will show an "N" trend.
Downstream steel demand is differentiated, and the proportion of steel used in manufacturing will rise.
Real estate, automobiles, and ships are the downstream industries of the steel industry, and their market trends and demand changes are closely related to the steel industry. To promote the connection between supply and demand and create a high-quality steel ecosystem, relevant representatives analyzed the downstream steel demand.
According to data from the National Bureau of Statistics, in the first quarter, the national fixed asset investment (excluding rural households) was 10,728.2 billion yuan, a year-on-year increase of 5.1%, the same as the whole year of the previous year. In terms of sectors, infrastructure investment increased by 8.8%, manufacturing investment increased by 7%, and real estate development investment fell by 5.8%. Relevant representatives said that downstream steel demand will diverge in the future.
Zhou Xuejun, president of the Shandong Steel Structure Industry Association, said that prefabricated steel structure buildings are being vigorously promoted due to their advantages such as lighter weight, convenient and efficient installation, less construction waste, and greener environmental protection. Shi Huien said that in the future, the proportion of steel used in China's construction industry will decline, and the proportion of steel used in the manufacturing industry will increase, but the total demand will show a downward trend. Specifically in the automotive field, it is estimated that in 2025, the amount of steel used in automobiles will be about 65 million tons; In 2030, the amount of steel used in automobiles will be about 62 million tons. In the future, automotive products will accelerate their development in the direction of new energy, lightweight, intelligence, and networking.
Su Bo, deputy secretary-general of the Shandong Shipbuilding Industry Association, said that since the beginning of this year, the international shipping market has rebounded beyond expectations, new ship orders have rebounded rapidly, new ship-building prices have risen, and the efficiency of shipbuilding enterprises has rebounded. Based on comprehensive analysis, it is expected that the global shipbuilding completion volume will remain at a historically high level of 100 million deadweight tons in 2023, with new orders below 100 million deadweight tons and handheld orders above 200 million deadweight tons. China's shipbuilding completion volume will exceed 42 million deadweight tons, with new ship orders of approximately 40-50 million deadweight tons, and handheld ship orders remaining at around 100 million deadweight tons.