The first quarter of the steel market in spring

In the first quarter of this year, nine aspects of the national steel market heating up significantly, various indicators are beautiful, iron ore, billet, finished materials and other prices have hit a new high for a period of time, showing a "spring blossom" situation.

In the first quarter of this year, China's steel market heated up significantly, "spring blossoms", mainly presented in nine aspects:

First, market prices rose on all fronts.At the beginning of the New Year, almost all iron and steel products and iron and steel industry chain commodities, almost all upstream (smelting raw materials and energy), midstream (steel and steel) and downstream (home appliances, containers, etc.) product prices, both spot prices and futures prices have risen, most or substantially, or even skyrocketed.According to market monitoring data, as of March 16, 2021, the national steel comprehensive price index is 184.7, up 7.7% compared with the beginning of the year, up 32.5% compared with the same period last year, in which the long material price index rose 29.4% compared with the same period last year, plate price rose 36.9%.On March 16 this year, the main contract of rebar closed at 4701 yuan, up 6.9% compared with the beginning of the year, up 32.3% compared with the same period last year.Iron and steel products and smelting raw materials in the same period of import prices also have a range of different rise.In the first two months, the average import price of iron ore was 942.1 yuan per ton, up 46.7% year on year.The average price of steel imports was 7,135.7 yuan per ton, up 0.9 percent year on year.

Second, domestic demand increased significantly.According to statistical data, in the first two months of this year, the apparent consumption of crude steel in China was about 166.837 million tons (excluding imports of billets and rough forgings, the same below), up 12% year on year.If imports of billets and rough forgings in the same period are included, it is estimated that China's crude apparent steel consumption in the first two months of this year was close to 170 million tons.It is estimated that the apparent consumption of crude steel in the first quarter will reach 250 million tons (including imports of billets and rough forgings), with an increase of about 10%.The main factors for the significant increase of domestic demand in the first quarter are the V-shaped rebound of macro economy, the start of construction this year is ahead of schedule, the capital is relatively abundant, and the market is optimistic about the expected atmosphere.

Third, steel exports turned down to rise.China exported 10.14 million tons of steel in the first two months of this year, up 29.9 percent year on year, according to the General Administration of Customs.In the direct steel exports turn down to rise at the same time, steel indirect export growth is more strong.In the first two months of this year, China's exports of mechanical and electrical products grew 54.1 percent year on year, accounting for 60.3 percent of the country's total export value, according to the General Administration of Customs.Among them, the export of automobiles (including chassis) increased by 93.4 percent, the export of loaders by 44 percent and the export of excavators by 60.7 percent.The significant recovery of the global economy and manufacturing industry, the widespread vaccination of the new coronavirus vaccine to alleviate the epidemic panic atmosphere, the depreciation of the US dollar pushed up the international market price level, etc., are the main stimulus factors for China's steel exports in the first quarter of this year.

Fourth, domestic iron and steel production increased substantially.According to statistics, in the first two months of this year, the national crude steel output was 174.99 million tons, up 12.9% year on year;Steel output reached 209.53 million tons, up 23.6 percent year on year.It is expected that the first quarter of the national crude steel output growth rate will not be less than 10%.Domestic iron and steel production can increase substantially the main factors: one is demand stimulation, there will be production demand;Second, new production capacity continued to be put into operation, providing a foundation for output growth.

Fifth, both social and business inventories declined year on year.Although steel and finished material production rose sharply in the first quarter, it still failed to meet stronger consumer demand, leading to a year-on-year decline in both social steel stocks and steelmakers' inventories.According to the platform monitoring data, as of March 12, 2021, the national steel social inventory has decreased by 15.2% year on year.In addition, according to China Iron and Steel Association statistics, in the first ten days of March this year, the national key steel enterprises steel inventory declined 16.5% year on year.

6) Imports maintained rapid growth.Domestic demand is strong, but also stimulated the country's steel imports continue to grow.China imported 2.395 million tons of steel in the first two months of this year, up 17.4 percent year on year, according to the General Administration of Customs.Not only that, the first quarter of this year the import volume of billet and rough forgings also increased more.It is expected that the import level of the above commodities will increase in March, and the import of iron and steel products (steel, billet and rough forgings) in the first quarter should increase by about 20% year on year.In addition, China imported 182 million tons of iron ore in the first two months of this year, up 2.8 percent year on year.

Seventh, a substantial appreciation of commodity inventories.At the beginning of the New Year, steel prices rose sharply in a full range of sustainable, so that the early black series of all commodity inventory, have achieved more appreciation.These appreciation, the corresponding increase in enterprise profits, whether it is steel enterprises, traders, or downstream steel consumption enterprises.Financial futures field, holding positions for the New Year's long, also obtain a lot of earnings.

Eighth, the performance of steel-related enterprises improved.Because of the impact of the above several aspects, such as price rise, inventory appreciation, production increase, etc., all make the steel related enterprises to improve their efficiency.It is expected that the first quarter of this year the profit situation of the national iron and steel enterprises should be good, compared with the same period will have a great increase.

Nine is the steel plate "bull market".At the beginning of the New Year, the stock market steel plate appeared a wave of rising prices, some steel listed companies have been trading limit.By the end of March, the national A - share steel plate rise should reach or close to 20%, the stock market steel plate wealth effect is obvious.