Analysis of the factors of steel price changes in the domestic market
In August, due to factors such as floods and repeated epidemics in some areas, the demand side showed a slowdown; the supply side also declined due to the impact of production restrictions. Overall, the supply and demand of the domestic steel market remained basically stable.
(1) The growth rate of the main steel industry slows down
According to data from the National Bureau of Statistics, from January to August, the national fixed asset investment (excluding rural households) increased by 8.9% year-on-year, which was 0.3 percentage points lower than the growth rate from January to July. Among them, infrastructure investment increased by 2.9% year-on-year, a decrease of 0.7 percentage points from January to July; manufacturing investment increased by 15.7% year-on-year, 0.2 percentage points faster than that from January to July; investment in real estate development increased by 10.9% year-on-year, down from January to July A decrease of 0.3%. In August, the added value of industrial enterprises above designated size increased by 5.3% year-on-year, 0.2 percentage points lower than the growth rate in July; automobile production fell 19.1% year-on-year, and the rate of decline increased by 4.6 percentage points from the previous month. Looking at the overall situation, the growth rate of downstream industries slowed down in August, and the intensity of steel demand declined.
(2) Crude steel production continues to decline month-on-month
According to the National Bureau of Statistics, in August, the national output of pig iron, crude steel and steel (excluding repetitive materials) was 71.53 million tons, 83.24 million tons and 108.80 million tons, down 11.1%, 13.2% and 10.1% year-on-year respectively; on average The daily output of crude steel was 2.685 million tons, an average daily decrease of 4.1% from the previous month. According to customs statistics, in August, the country exported 5.05 million tons of steel, a decrease of 10.9% from the previous month; imported steel was 1.06 million tons, an increase of 1.3% from the previous month, and the net export of steel was 4.34 million tons of crude steel, a decrease of 470,000 tons from the previous month. Looking at the overall situation, the country’s daily average crude steel output has fallen for the fourth consecutive month. However, the domestic market demand has declined and the export volume has decreased month-on-month, which has offset some of the impact of the reduction in production. The supply and demand of the steel market have been relatively stable.
(3) The price of raw fuel materials fluctuates at a high level
According to the monitoring of the Iron and Steel Association, at the end of August, the price of domestic iron concentrate dropped by 290 yuan/ton, the price of CIOPI imported ore dropped by 26.82 dollars/ton, and the prices of coking coal and metallurgical coke increased by 805 yuan/ton and 750 yuan/ton respectively. The price of scrap steel fell 28 yuan/ton from the previous month. Judging from the year-on-year situation, the prices of raw fuel materials are still high. Among them, domestic iron ore concentrates and imported ore rose by 31.07% and 24.97% year-on-year, coking coal and metallurgical coke prices rose by 134.94% and 83.55% year-on-year, and scrap prices rose by 39.03 year-on-year. %. Although the price of iron ore has dropped significantly, the price of coal coke has risen sharply, causing the cost of steel to remain at a relatively high level.