Steel Market Pressure Continues To Increase

After entering the second half of the year, driven by the counter-cyclical adjustment of the decision-makers, most steel market correlation indicators increased steadily, showing the resilience of China's economy and steel demand growth. On the other hand, iron and steel enterprises actively release production capacity, and the national output of steel and finished materials has increased significantly, resulting in continued pressure on the market supply. The situation is not expected to change this year. The excessive release of steel and steel production capacity is still the biggest pressure on the steel market in the future.

First, the structure of total demand continued to be weak internally and strong externally

In the first half of this year, the country's steel exports grew strongly, and steel exports in July were 7.308,000 tons, an increase of 9.5% year-on-year, continuing this momentum. Among the important products indirectly exported of steel, 392,000 automobiles were exported in July, an increase of 35.1% year-on-year. At the same time, domestic steel demand growth momentum is relatively weak. Its main related indicators show that in July, the national industrial added value above designated size increased by 3.7% year-on-year, and the national fixed asset investment increased by 3.4% year-on-year from January to July, which is a small growth trend. In terms of fixed asset investment, infrastructure investment increased by 6.8% in the first seven months of the year, manufacturing investment increased by 5.7%, and real estate development investment fell by 8.5%. According to this calculation, although the growth of domestic demand for steel in July remains unchanged, its growth level is far lower than the growth momentum of exports in the same period.

Second, the domestic production of steel and finished materials increased significantly

Because steel prices have risen in the previous period, product profits have increased, and market demand is indeed increasing, coupled with the need to compete for market share, it has stimulated steel companies to actively increase production. According to statistics, in July 2023, the national crude steel production of 90.8 million tons, an increase of 11.5%; Pig iron output was 77.6 million tons, up 10.2% year on year; Steel production of 116.53 million tons, an increase of 14.5%, both reached a double-digit growth level, which should be a period of greater growth.

The rapid growth of galvanized steel pipe and stainless steel production has exceeded the level of demand growth in the same period, resulting in an increase in social inventory and a downward pressure on prices. Key large and medium-sized iron and steel enterprises ten-day production data, due to the steady growth policies continue to be introduced and landing of strong expectations to lead the common impact of off-season to peak season stock demand, large and medium-sized iron and steel production enterprises production capacity release rhythm has again accelerated signs. According to statistics, in early August 2023, the average daily output of crude steel in key steel enterprises was 2.153 million tons, up 0.8% from the previous ten days and 10.8% from the same period last year. The inventory of key iron and steel enterprises in the country was 16.05 million tons, an increase of 10.8%; In the same period, the social inventory of five major varieties of steel in 21 cities across the country was 9.64 million tons, an increase of 2.4%.

Media Contact
Company Name: Tianjin Xingrong Youfa Steel Co., Ltd.
Contact Person: Xingrong Youfa Steel
Email:Send Email [https://www.abnewswire.com/email_contact_us.php?pr=steel-market-pressure-continues-to-increase]
Phone: +86 13920018539
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City: Jinghai
State: Tianjin
Country: China
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This release was published on openPR.