According to the latest report released by the Professional Committee of Iron and Steel Logistics of China iot, in November, the PMI of the steel industry was 48.2%, up 2.6 percentage points from the previous month, ending the operation trend of about 45% for 3 consecutive months, and the steel industry has stabilized in the short term. It is expected that in December, as the weather further turns cold, the demand side will contract, the price of raw materials will decline, the high price of steel will fall, and the production of steel mills will decline again.
The report shows that in November, the domestic steel market demand performance has picked up. A number of factors have supported the demand for steel, first, infrastructure, with the implementation of one trillion special national debt and the steady progress of the “three major projects”, infrastructure continues to develop; Second, in terms of real estate, a new round of building protection work has been intensified, and a series of measures have been introduced at the national level, especially financial institutions are increasing their support. Third, in terms of key industries, important steel industries such as automobiles and ships are operating well; Fourth, in terms of funds, RMB loans increased by 644.6 billion yuan in October, an increase of 831.2 billion yuan year-on-year. In October, the scale of social financing increased by 1.85 trillion yuan, 910.8 billion yuan more than the same period last year, the capital situation has improved compared with the previous period, and market trading has become more active.
From the production side, steel production has picked up slightly, first, market demand has picked up since November, and the production willingness of enterprises has increased slightly; Second, the heating season production restriction policy is relatively loose, and there is no obvious inhibitory effect on steel production. In this case, steel production picked up slightly. The production index was 48%, up 4.6 percentage points from the previous month, ending three consecutive months of decline. In terms of price, under the dual role of rising demand and rising costs, steel prices have fluctuated upward. On the whole, the current steel prices are rising rapidly, but due to the rising cost of raw materials, the problem of meager profits of steel mills has not been significantly improved.
The report is expected in December, steel market demand will shrink. The price of raw materials fluctuated downward, and the high price of steel fell. At present, the high price of iron ore has been concerned by the relevant ministries, while the decline in demand has also made it difficult for the fundamentals to maintain high raw material prices, speculation is difficult to maintain, and the high price of raw materials in the later period is a high probability event. Due to the decline in demand and the weakening of cost support, steel prices are also difficult to maintain the current rapid upward momentum, and the subsequent high is expected to fall.
