The steel market will seek progress while maintaining stability - Shandong Jiugang Tisco Steel Co., Ltd.

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The steel market will seek progress while maintaining stability

The steel market will seek progress while maintaining stability

This year’s “Government Work Report” proposes to promote energy conservation and carbon reduction in steel, non-ferrous metals, petrochemical, chemical, building materials and other industries, and resolutely curb the blind development of high-energy-consuming, high-emission, and low-level projects. Promote the transition from “double control” of energy consumption to “double control” of total carbon emissions and intensity, and improve the incentive and restraint policies for pollution reduction and carbon reduction. Strengthen domestic resource production support capabilities, accelerate the exploration and development of oil, gas, minerals and other resources, improve the national strategic material reserve system, ensure the supply of primary products, and maintain a basically stable price level.

“The report has released positive signals in ensuring the supply of steel raw materials, carbon emission control, etc., increasing the exploration and development of domestic iron ore resources, and fully tapping the potential of domestic resources, so that the price of raw materials can no longer be controlled by others, which is conducive to breaking my country’s import over the years. Iron ore is too dependent on foreign countries. Judging from the report, steel companies should enhance their awareness of carbon emission control in the future, find a path for green, low-carbon and high-quality development, and actively implement the ‘dual-carbon’ policy.”

“Combining the raw material side and the supply and demand side, ‘stable operation’ will be the general tone of the steel market this year. The policies mentioned in the two sessions will help iron ore prices return to fundamentals on the one hand, and control steel production on the other hand.

In terms of raw materials, at present, coke enterprises have low profits, and some coke enterprises are in a state of loss. In addition, the northern coke enterprises are still facing production restrictions to varying degrees. The coke supply is relatively tight, and coke enterprises are more willing to increase coke prices. Most steel companies and scrap access bases clearly require scrap suppliers to provide value-added tax invoices before supplying. Arrival quantity. Superimposed on the rebound of domestic steel prices, the bullish sentiment in the market has gradually become stronger, and some steel companies have begun to raise the ex-factory price of steel. In addition, iron ore futures and spot prices have risen to varying degrees, some steel companies have resumed production and replenishment, and domestic port ore prices have risen sharply.

In terms of supply, the supply side of the steel market will be gradually released after the two sessions. After the end of the Beijing Winter Olympics, the weekly production of rebar has changed from rising to falling, reaching 2.4398 million tons, which is at a historical low compared with 3.77 million tons in the same period in 2021 and 4 million tons in the same period in 2020. This year, under the circumstance of increasing “steady growth” efforts, the production limit of steel enterprises may slow down.

On the demand side, demand will recover faster after the two sessions. “Previously, the market had strong expectations for the downturn in the real estate market and the reduction in demand, and they were generally bearish on the rebar market this year. However, judging from the information released by the two sessions this year, the country will vigorously support the development of infrastructure this year, which to a certain extent can Make up for the impact of the weakening real estate demand. In addition, many places vigorously advocate and support new energy power construction this year, although the demand for traditional construction steel such as rebar and coil screw is limited, but the demand for new construction steel may be very strong. Obviously, the contradiction between supply and demand of traditional construction steel can be alleviated.”

Overall, the current steel market is in a situation of “double rising supply and demand”, in which the release of demand is greater than the release of supply, and the steel market is expected to run strongly in the short term.

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