Since the beginning of this year, driven by economic growth and increased market expectations, steel prices have slightly rebounded, and the operating conditions of steel enterprises have improved. However, due to the rapid release of steel production capacity and relatively weak market demand, the steel market is still in a state of oversupply. Coupled with the rapid rise in prices of raw materials such as iron ore, the business situation faced by steel enterprises remains severe.

one、 The operational characteristics of the steel industry in the first quarter

oneExcessive growth in steel production capacity and output, with crude steel daily production reaching a new high

According to data from the National Bureau of Statistics, in the first quarter, the production of pig iron, crude steel, and steel (including duplicate materials) in China was 1.78 million tons, 9.89 million tons, and two-fourfivefivefiveone-million tons, respectively, an increase of 7.6%, 9.one%, and one-two-three% year-on-year, respectively. The growth rate increased by four, six, and eight percentage points compared to the same period last year. Among them, the crude steel production of member enterprises increased by five. 8% year-on-year, which was three. three percentage points lower than the national growth rate.

In the first quarter, the national average daily crude steel production reached a record high of 20000 tons. Among them, the crude steel production in the third month was 6.63 million tons, a year-on-year increase of 6.6%, with an average daily production of 29000 tons, an increase of 0.7% compared to the cumulative daily production level in the first month. The average daily crude steel production of member companies is 70000 to 27000 tons, which is also at the highest level in history. Among them, the crude steel production in March was fivethree million tons, a year-on-year increase of five.0%.

twoSteel exports have increased while imports have decreased

According to customs statistics, in the first quarter, China exported a total of 10000 tons of steel, a year-on-year increase of 8.8%; Accumulated imports of steel amounted to three thousand tons, a year-on-year decrease of five. three%, while imports of steel billets amounted to one five thousand tons, a year-on-year increase of three 8.6%; The total net export of rough steel from raw materials was 1.76 million tons, an increase of 2.77 million tons year-on-year, an increase of 2.8%; Imported iron ore amounted to 8.648 million tons, a decrease of 40000 tons year-on-year, which was basically the same as the previous year.

According to the above data estimation, the apparent consumption of crude steel in China in the first quarter was 1.8 million tons, an increase of 0.8 million tons year-on-year, or 8.1%. Considering that both corporate and societal inventories have significantly increased, actual consumption growth is much lower than this level.

threeSteel prices are showing a low rebound trend

In the first two months of this year, steel prices in the domestic market showed a gradual upward trend. As of the end of February, the CSPI Steel Composite Price Index of the Iron and Steel Association was oneoneone.onetwo points, an increase of five.8one points from the one0five.threeone point at the beginning of the year, an increase of five.fivetwo%, but a year-on-year decrease of 7.3 points, a decrease of 6.20%. Entering the third month, steel prices showed a downward trend, with a steel price index of one-07.0 five points at the end of the third month, a decrease of four.07 points month on month, a decrease of three. 66%, and a continuous decline for five weeks.

fourThe economic benefits of steel enterprises have slightly improved, but they are still very low

According to statistics from the Iron and Steel Association, in the first quarter, large and medium-sized steel enterprises achieved sales revenue of 87.5 billion yuan, a year-on-year increase of 0.94%; Realize a profit and tax of 260 million yuan, a year-on-year increase of 3.04%; Achieved a profit of 24.86 billion yuan, turning losses into profits year-on-year. However, in the first quarter, the profit decreased month by month, with only 2.67 billion yuan in three months, including 0.8 billion yuan in one month, 998 million yuan in two months, and only 2.67 billion yuan in three months; The sales profit margin is 0.8%, with a loss of 3.9%, of which the loss in the third month reached fourfive.three%.

From the perspective of profit composition, the main steel business has significantly reduced losses in the first quarter of this year, and the proportion of investment income and other business income has correspondingly decreased.

fiveFixed assets investment in the steel industry continued to grow

According to data from the National Bureau of Statistics, in the first quarter, the cumulative investment in fixed assets in the national steel industry was 92.4 billion yuan, a year-on-year increase of 7.3%. Among them, the investment in the black metal mining and beneficiation industry was RMB 0.6 billion, a year-on-year increase of RMB 0.5%, a decrease of two percentage points compared to the same period last year; The investment in black metal smelting and rolling processing industry was 76.8 billion yuan, a year-on-year increase of 7.7%, a decrease of 0.1 percentage points from the same period last year.

two、 The main problems in the operation of the industry

oneThe level of steel production is relatively high, and the contradiction between market supply and demand is intensifying

In the first quarter of this year, the growth rate of national fixed assets investment (excluding farmers) was 0.9%, basically the same as that of the same period last year; The growth rate of real estate investment was 20.0%, a year-on-year decrease of 3.3 percentage points; The growth rate of added value of industrial enterprises above designated size was 9. live%, a decrease of 2.0 percentage points year-on-year. Overall, the domestic market is in a low season for steel demand, but in the first quarter, the country's crude steel production increased by 9.one%, with an average daily output reaching a historical high of 20000 tons. In the context of limited market demand growth, the significant increase in steel production has further intensified the contradiction of oversupply in the steel market, and competition among enterprises, especially in product homogenization, has become more intense.

twoSteel inventory is rising month by month, and the downward pressure on the market is increasing in the later stage

Since the beginning of this year, the social inventory of steel has been increasing month by month. By the end of March, the social inventory of major steel markets and varieties in China had increased by over 10 million tons compared to the end of last year, with a growth rate of over 80%. The continuous increase in steel inventory has brought significant pressure to the steel market. The inventory of steel enterprises has also significantly increased. According to the association's statistics on member units, as of the end of March, the inventory of steel enterprises was one four eight three million tons, an increase of four seven hundred and seventy thousand tons from one six million tons at the beginning of the year, an increase of four seven and four percent.

threeInternational trade frictions are increasing, making it more difficult to export steel

Since the beginning of the past three years, due to slow international economic recovery and increasing international trade protection, several countries including the European Union, the United States, Australia, Canada, Malaysia, Thailand, and India have launched anti-dumping, anti subsidy investigations, and trade protection measures against China's steel product exports. In the first quarter of this year, there were more than ten cases involved, especially in ASEAN countries, which have recently received strong reactions. With the increasing number of trade friction events, the difficulty of exporting steel products from China will further increase.

fourThe rapid recovery of raw material prices makes it difficult to improve economic efficiency

According to the China Iron Ore Price Index (CIOPI) monitoring, the imported iron ore price at the beginning of this year was one two four one nine US dollars, and by mid February it had risen to one five eight five four US dollars. The price fell slightly in March and began to rise again in April. Compared with the beginning of the year, the price of imported iron ore has increased by more than two to three dollars per ton, far exceeding the increase in steel prices. At the same time, the price of domestic iron ore has also risen, resulting in high steel production costs. On February 20th of this year, the country raised railway freight prices again, with a one. free per ton kilometer increase, affecting the steel industry by more than 20 billion yuan annually. At present, the profitability level of the steel industry is still at the lowest level in the industrial sector, and the task of reducing costs and increasing efficiency for steel enterprises is extremely difficult.

three、 Analysis of the situation for a certain period in the future

According to the spirit of the Central Economic Work Conference and the recently held National People's Congress, China will continue to implement an active fiscal policy and a prudent monetary policy this year to maintain sustained and healthy economic development; The country will vigorously promote the construction of new urbanization and support the development of the real economy, which is conducive to the development of the steel industry. Compared to last year, the overall market environment of the steel industry will be better this year. With the arrival of the peak demand season in the second quarter and the new government taking office, the demand for steel in the market will improve. However, due to the rapid release of production capacity and the pressure of rising costs, the operating conditions of steel enterprises are still difficult to fundamentally improve.

oneThe demand for steel is gradually improving, but it is still difficult to achieve significant growth

The expected target for China's economic growth this year is set at around 7.5%, although slightly lower than last year, it is still relatively fast growth, and investment will still play a key role in economic growth. Promoting urbanization construction will be the biggest challenge for the steel market this year; Highlights”, The automotive industry will continue to grow, railway investment will accelerate, and downstream demand will gradually improve under favorable factors such as the gradual recovery of the shipbuilding industry. But at the same time, it should be noted that steel consumption is unlikely to increase significantly, and steel companies cannot have overly high expectations, let alone blindly expand production.

twoThe steel market is oversupplied, making it difficult for steel prices to significantly increase

Due to the rapid release of steel production capacity, significant increase in social inventory, and the impact of increased international trade frictions, the situation of oversupply in the domestic market is difficult to fundamentally change in the short term. Driven by rising costs, there is a possibility of an increase in steel prices in the later stage. However, due to oversupply in the market, high steel inventories, intensified international trade protection, and more intense market competition, it is difficult to significantly raise steel prices. If production capacity is not controlled, it may continue to decline.

threeCosts are on the rise, and steel companies will still be in a low profit situation

Although the global economic situation this year is better than last year, overall the recovery is slow. Major developed countries have implemented loose monetary policies, and international commodity prices are showing a stable and upward trend. China is facing imported inflationary pressure. From the market situation, in addition to the continuous rise in prices of raw materials such as iron ore and scrap steel, the costs of land, labor, and environmental protection will also increase. China will increase its efforts in energy conservation and emission reduction, and the pace of reforms in resources, energy prices, finance and taxation will further accelerate, resulting in increased costs. Steel enterprises; High cost, low profit; The situation is difficult to change in the short term.

four、 The next key tasks for the steel industry

oneSteel companies need to accelerate the pace of transformation and structural optimization

Faced with the complex and severe domestic and international economic situation, the steel industry should conscientiously implement the proposal put forward at the expanded meeting of the association's board of directors at the beginning of the year; Transforming methods, optimizing structure, improving quality, and increasing efficiency; The work goal is to accelerate the transformation of development mode as the main line of work, and strive to improve the quality of enterprise operation and economic benefits through measures such as controlling capacity release, optimizing product structure, deepening benchmarking and tapping potential, and strengthening internal management.

twoImplement policies for the steel industry and strictly control the rapid growth of steel production capacity

The primary challenge facing the steel industry is overcapacity and oversupply in the market. We should take the review of the "Standard Conditions for the Steel Industry" as an important lever to resolve overcapacity, carefully understand the current development status of steel enterprises, increase efforts to eliminate outdated production capacity, strictly control the rapid growth of steel production capacity, and promote the structural adjustment and transformation upgrading of the steel industry.

threeStrengthen industry self-discipline and promote market stability

One is to organize relevant enterprises to discuss and negotiate, reasonably control steel production, especially the production of key varieties, and strictly prevent excessive growth in production; Secondly, we need to strengthen the coordination of supply and demand in the domestic market, regulate the sales behavior of enterprises, streamline the mechanism for forming steel product prices, maintain market stability and overall industry interests, promote win-win cooperation, and avoid vicious competition; Thirdly, we will promote steel exports in a standardized and orderly manner, strengthen information exchange and self-discipline among export enterprises, and improve the quality of exported products; The fourth is to strengthen export warning work, enhance coordination and communication with major exporting countries or regions' steel organizations, improve understanding, and reduce trade frictions.

fourIn depth development; Benchmarking and tapping potential; Activity, increase efforts to reduce costs and increase efficiency

In the face of a severe market environment, further development is needed; Benchmarking and tapping potential; Activity. The association should promote the industry through typical experiences, refine enterprise benchmarking content, organize special seminars, and other methods; Benchmarking and tapping potential; Continuously deepening work, vigorously reducing costs and expenses, and striving to improve industry profitability. Take practical measures to improve the uniformity of benchmarking standards and the timeliness and comparability of data, in order to enable steel enterprises to compare costs and tap into their own potential in a complex and ever-changing market environment; Ensure profitability; Provide important references.

fiveContinue to promote the work of iron ore spot trading platform

As of the second two days of April, the iron ore spot trading platform has made a total of 60 declarations, with a declaration volume of 78.5 million tons and a total transaction volume of 7.4 million tons, with a transaction volume of 6.3 million tons. Calculated on a monthly average, both the declaration volume and transaction volume have significantly increased compared to last year, indicating that the platform is gaining recognition from a large number of enterprises and traders. With the expansion of transaction volume, the role of the platform will gradually become apparent.

In the future, the focus of the iron ore spot trading platform will still be to further expand the platform's trading volume. Firstly, we call on member companies, especially large enterprises, to take the lead in increasing their procurement volume on the platform; Secondly, continue to promote major foreign iron ore suppliers to increase their resource allocation on the platform; Thirdly, we need to change our service concept, strive to provide high-quality services for both supply and demand sides, and continuously expand the platform's spot trading functions. In short, the spot trading platform for iron ore plays an important role in discovering prices and promoting fair trade, and member companies should continue to strongly support it.