Into April, steel demand has turned significantly weaker, table demand continuous decline, lower than the average value of the table demand in March, the contradiction between supply and demand began to appear. But in yesterday’s building materials turnover 218,500 tons, which is also the first time in April turnover exceeded 200,000 tons, the market speculative demand increased, steel traders began to restock, the terminal rigid demand toughness is still there, the market sentiment warmed up. It is understood that some specifications of rebar appeared out of stock, because there are high prices of resources in the early stage, traders are strong mentality to hold prices.
The National Bureau of Statistics data show that in March 2023, China’s average daily crude steel production of 3,088,100 tons, a record high for the same period of the past year; the average daily steel production of 4,104,800 tons. January to March, China’s crude steel production of 261,560,000 tons, an increase of 18,184,000 tons, an increase of 6.1%; steel production of 33,259,000 tons, an increase of 20,660,000 tons, an increase of 5.8%. . Crude steel and steel production increased significantly in the first quarter, then the subsequent pressure to reduce production increased, the possibility of production cuts expected in the off-season from June to August is greater.
Without taking into account the policy production reduction factors, the steel mills initiative to reduce production is limited, more or wait and see, looking forward to other steel mills to reduce the amount, and their own reduction as little as possible. At present, the electric furnace losses intensify, the amount of steel mills shut down for maintenance increased, but the blast furnace still has a certain profit or profit and loss margin point, and blast furnace shutdown to start the higher cost, generally not for two or three months in a row more than 200 yuan loss situation, the initiative to reduce production is not enough power. This also to some extent limits the height of the steel price rebound.
Crude steel is expected to be introduced to suppress the price of raw materials, but the impact on the rise and fall of steel prices need to observe the strength of steel demand recovery. Under the production reduction, steel prices are driven down by the decline in raw material prices or demand outbreak steel prices counter-trend to go independent up market with uncertainty, focusing on the rhythm and strength of steel mills to reduce production. Coke three rounds of lifting, coke contract has been discounted spot about 150 yuan / ton, iron ore from mid-March fell 120 points, short-term with the release of bearish sentiment, raw materials have stabilized the demand for rebound.
In real estate, from January to March, the national real estate development investment was 2597.4 billion yuan, down 5.8% year-on-year; among them, residential investment was 197.67 billion yuan, down 4.1%. from January to March, the sales area of commercial properties was 299.46 million square meters, down 1.8% year-on-year. National real estate development investment is less than expected, the current housing enterprises to ensure the delivery of buildings and delivery, new construction projects are reduced, the back end of the housing enterprises is mainly the demand for plates, less demand for building materials, private housing enterprises sales return funds to repay loans to reduce leverage, basically not invested in land acquisition and new construction project investment, the real estate industry is slow to pick up, from land acquisition to late construction conduction to the actual demand for steel The real estate industry is slow to rebound, from land acquisition to late construction to the actual demand for steel will take time.
Data released by the Ministry of Finance show that from January to March 2023, new special bonds of 1,322.8 billion yuan were issued around the country, mainly to support municipalities and industrial parks, infrastructure, transportation infrastructure, social undertakings and key areas identified by the Party Central Committee and the State Council, such as subsidized housing. Entering the second quarter, fiscal and monetary policies are expected to continue to ease, monetary liquidity accelerates, and infrastructure still plays a strong supporting role.
The last two weeks of April, the May Day holiday replenishment gradually started, the market speculative demand increased, the terminal rigid demand increased procurement volume, this week’s apparent demand is expected to increase ringgit, steel prices rebounded in stages, the rebound height of the thread futures temporarily look at 4020-4050, hot volume above the concern 4080-4130. steel traders can moderate replenishment, high fast shipments, timely cash profits.
