Compared with the same period in 2021, the national crude steel output decreased significantly in the first quarter of this year.
The relevant person in charge of the national development and Reform Commission said that this year, together with many ministries and commissions, it will continue to carry out the reduction of crude steel production nationwide and guide enterprises to abandon the extensive development mode of winning by quantity. At the same time, in the tone of seeking progress while maintaining stability, we should give play to the role of market mechanism, maintain pressure and avoid "one size fits all".
In the traditional peak market season, affected by many factors, the steel market performance is flat. The analysis organization predicts that with the continuous resumption of work and production in many places, the subsequent market demand will gradually return.
annual crude steel output continued to decrease
On April 19, at the April press conference held by the national development and Reform Commission, Meng Wei, spokesman of the national development and Reform Commission, said that in order to maintain the continuity and stability of the crude steel reduction policy and consolidate the results of crude steel output reduction, the national development and Reform Commission, the Ministry of industry and information technology, the Ministry of ecological environment and the National Bureau of statistics will continue to carry out the national crude steel output reduction in 2022 to guide iron and steel enterprises to abandon the extensive development mode of winning by quantity, Promote the high-quality development of the iron and steel industry.
According to the data released by the National Bureau of statistics, China's crude steel output reached 1.033 billion tons in 2021, a decrease of 31.98 million tons or 3.0% compared with the same period in 2020.
Since 2021, global commodity prices have generally risen, and there is a strong demand for steel at home and abroad, driving the production enthusiasm of Chinese steel enterprises. In the first half of last year, China's crude steel output increased by 11.8% year-on-year to 560 million tons. Since the second half of the year, China's crude steel output has been significantly reduced. The year-on-year decline of crude steel output in a single month once exceeded 20% for three consecutive months, and finally achieved the goal of reducing crude steel output in the whole year.
Meng Wei said that in the process of reducing crude steel output, we will grasp the general tone of stability and seeking progress while maintaining the continuity and stability of the supply side structural reform policy of the iron and steel industry, adhere to the principles of marketization and rule of law, give play to the role of market mechanism, stimulate the enthusiasm of enterprises, and strictly implement relevant laws and regulations such as environmental protection, energy consumption, safety and land use.
We should also insist on distinguishing situations, maintain pressure and avoid "one size fits all". Meng Wei said that it will focus on reducing crude steel production in key areas, such as Beijing Tianjin Hebei and its surrounding areas, the Yangtze River Delta, Fenwei plain and other key areas of air pollution prevention and control; In terms of key objects, we will highlight the reduction of crude steel production with poor environmental performance, high energy consumption and relatively backward process equipment, so as to ensure the year-on-year decline of crude steel production in 2022.
promote high-quality development of iron and steel industry
According to the data released by the National Bureau of statistics, the reduction of crude steel production in the first quarter has made a relatively good start.
In the first quarter of this year, China's crude steel output totaled 243 million tons, a year-on-year decrease of 10.5%; The output of pig iron and steel reached 200 million tons and 312 million tons respectively, with a year-on-year decrease of 11% and 5.9% respectively.
Wang Guoqing, director of Lange Iron and Steel Research Center, said that at present, China's steel enterprises are facing the situation of high cost, weak demand, supply recovery but profit contraction. The clarification of the industrial policy direction of the national development and Reform Commission is of positive significance for China's steel industry to get rid of the current dilemma.
Wang Guoqing said that under the current weak steel market demand, the clear target of crude steel output reduction will help to alleviate the pressure on the supply side; The continuation of the policy of reducing crude steel output throughout the year will help promote the high-quality development of the iron and steel industry. Adhering to distinguishing situations and avoiding "one size fits all" will help to optimize the industrial structure and achieve the development goal of reduction.
From the perspective of the whole supply chain, the prices of iron ore and coke remain high, and the cost pressure of steel enterprises is large. Lange Iron and Steel Research Center estimates that the gross profit per ton of steel of some varieties of steel enterprises is already on the edge of loss. The continuation of the crude steel output reduction policy will restrain the demand for raw materials, help the raw material cost return to rationality and improve the profitability of iron and steel enterprises.
Since late November last year, the prices of raw materials such as iron ore and coke have surged again. As of the afternoon closing of April 19 Beijing time, the main contract price of China's iron ore futures closed at 887 yuan / ton, down 3.27%; Coke futures closed at 3898.5 yuan / ton, down 3.17%. At present, the price of raw materials is still at a phased high.
3 steel exports fell sharply
Due to the comprehensive influence of various factors, China's steel exports also fell sharply year-on-year in the first quarter.
According to the data released by the General Administration of customs, in March this year, China exported 4.945 million tons of steel, a year-on-year decrease of 34.4%; In the first quarter of this year, China exported 13.179 million tons of steel, a year-on-year decrease of 25.5%.
Since 2022, with the recovery of global steel production and the slowdown of steel demand expansion, the supply and demand situation of overseas steel has gradually balanced, the international market price tends to fall, the price advantage and profit space of China's steel export have weakened, and the elimination of China's steel export tax rebate policy has restrained China's steel export to a certain extent.
Wang Guoqing said that in the first quarter of 2021, the overseas steel production capacity recovered slowly and the overall demand increased significantly, resulting in the high steel export base in the same period last year. In addition, the current overseas demand was weaker than that in the same period last year and the departure of some goods in March was affected. All these factors led to the year-on-year decline of steel export data in March this year.
In the Chinese market, many key projects started in the first quarter, which brought strong expectations for the overall steel demand of the whole year. However, due to the poor sealing management and logistics in many places, the steel demand weakened.
Throughout March, under the joint influence of many factors such as the lifting of the production restriction policy in the heating season and the limitation of logistics and transportation in some regions, the capacity release of Chinese steel enterprises has been under pressure and rebounded. From the daily production data, the daily output of crude steel in March was still lower than that in the same period last year, but it has recovered to the highest level since July last year.
According to the data released by China Iron and Steel Industry Association, in early April, the daily output of crude steel produced by national key statistical steel enterprises reached 2.224 million tons, an increase of 2.96% month on month; According to the national key statistics, the steel inventory of steel enterprises was 184881 million tons, the highest since this year, an increase of 1.8681 million tons compared with the end of March, with a month on month increase of 11.24%.
Lange Iron and Steel Research Center pointed out that April is the traditional peak season of the steel market, but at present, steel enterprises are facing the dual pressure of limited transportation of raw materials and finished products, forcing the release of steel enterprises' production capacity to appear a short-term pressure situation. The capacity release of medium and large steel enterprises is stable, but due to the high cost end price and low profit of finished products, the capacity release of some short process steel enterprises is obviously suppressed.
From the demand side, the steady growth policy at the national level has been strengthened. Both the resumption of projects and the guarantee of funds have formed strong expectations for the market. However, due to the epidemic factors, the progress of some projects has been greatly affected, resulting in short-term transactions in the steel market less than expected. Lange Iron and Steel Research Center predicts that with the emergence of the effect of public health prevention and control, the downstream demand will gradually return.
