Views: 9 Author: Site Editor Publish Time: 2023-01-06 Origin: Site
"There are still risks in the construction steel market in the first quarter of 2023, and we still need to wait for the demand to recover in March" - Xinhua Finance
I will summarize the views and analyses of all parties and share them with you.
Influenced by various factors, it is estimated that in 2023, China's steel market demand pattern will be strong inside and weak outside, steel production will still release pressure, and the price market will continue to fluctuate widely, but the price center position is basically the same as that in 2022. We expect that in 2023, compared with 2022, the domestic iron and steel industry will make greater efforts in capacity and output regulation and merger and reorganization policies, but the decline in demand will be slightly greater than the contraction in supply. Therefore, from the perspective of the whole year, the focus of steel prices will still move downward, and demand will still be the main driving factor of prices.
1. Steel demand pattern is strong inside and weak outside
The mainstream view is that the global economy will decelerate significantly in 2023, and there is even a risk of falling into economic recession, among which the risk of economic recession in European and American countries is greater. Under this general pattern, the demand for total goods in the world has weakened, including total steel consumption and total demand for steel consuming products. Under its influence, China's steel exports in the new year, especially the indirect steel exports driven by the export of mechanical and electrical products, will no longer have a significant growth. From January to November 2022, the export of mechanical and electrical products in China increased by 5.6% (in US dollars) year on year, of which the export of automobiles increased by 73.1% year on year. It is estimated that in 2023, the export growth rate of mechanical and electrical products across the country will fall back to less than 4%, and the export growth rate of steel consuming products such as automobiles, construction machinery, mechanical equipment and household appliances will also fall back a lot, showing a weak growth pattern as a whole.
On the other hand, China's measures to stabilize growth have been effective and new measures to stabilize growth have been taken. In 2023, the national infrastructure investment will maintain a high growth rate, and the year-on-year growth rate in some months will maintain a double-digit level; In particular, real estate investment is expected to continue to improve, significantly improving compared with the sharp decline in 2022. In addition, the constraints of the "epidemic" on economic activities and consumption are significantly reduced, which will make the national macro-economy more accelerated in 2023. It is estimated that the annual economic growth (GDP) is expected to exceed 5%, thus laying a solid foundation for domestic demand for steel. The impact of the above two aspects will make the steel demand in the new year show a pattern of internal strength and external weakness.
2. Structural construction materials are better than production materials
In 2023, we will further exert the key effect of investment on stable economic growth. Infrastructure investment, equipment manufacturing investment, real estate investment, private investment, overseas investment, etc. will be fully developed. The overall national investment in fixed assets will reverse the weak growth of the previous year, resulting in a significant increase in the demand for construction steel. At the same time, the PMI index of domestic and foreign manufacturing industries has weakened synchronously, especially the world economy has slowed down significantly, and may even fall into recession. This has a negative impact on China's mechanical and electrical products exports, and will weaken the domestic demand for production steel. Therefore, in the new year, among the major categories of China's steel demand, construction materials will be better than production materials.
3 Iron and steel resources are relatively stable
In 2022, the level of steel stock will decrease significantly, and the regulation effect of market stock reservoir will weaken. According to the market monitoring data of Lange Iron and Steel Network, as of December 23, 2022, the national steel social inventory index was 86.1 points, down 6.7% over the same period last year. The social inventory index of building materials was 94.1 points, down 7.9%.
According to data estimation, the statistical output of crude steel in 2022 will decrease by about 2% year on year. Against the background of stable release of domestic demand and continued contraction of imports, it is estimated that there is not much room for crude steel output to continue to decline in 2023. It is estimated that the national crude steel statistical output will reach 1.01 billion tons in 2023, with a year-on-year change of about 1%.
In 2023, steel imports from secondary channels of steel resources will continue to be low. The main reason is that in 2023, the steel supply chain in some regions of the world except China will be impacted by energy; Secondly, China's steel price competitiveness has been further enhanced. It is estimated that in 2023, the national steel import volume will be about 10 million tons, roughly equivalent to the level of the previous year, or even continue to shrink.
4. The wide fluctuation of steel price remains
In 2023, the fundamentals of the steel market will still be subject to many factors, and there will be no overwhelming unilateral tendency, which determines that the steel market will continue to fluctuate widely in the new year. It is estimated that the difference between the trough and peak of the annual steel price per ton is about 1000 yuan.
From the month on month situation of the whole year, if there is no large-scale winter storage at the end of this year, there will be a wave of rising market in spring, and then fall back. The price level in the first half of the year was higher than that in the second half.
From the difference of different varieties, construction materials will be better than production materials.
It is worth noting that because the supply and demand of steel market in 2023 is expected to be better than that in the previous year, the average price level of steel is expected to be higher than that in the second half of 2022, and the overall price center is basically equivalent to that in 2022.