company news about Short-term steel prices are generally easy to fall and hard to rise

As market conditions improve and demand becomes stronger, manufacturing production activities will accelerate expansion in December 2021. The Caixin China Manufacturing PMI for December 2021 announced on January 4 recorded 50.9, a 1.0 percentage point increase from November, and the highest value since July 2021, showing that manufacturing production and operation activities have improved.

The PMI of the manufacturing industry in December 2021 announced by the Bureau of Statistics was 50.3, an increase of 0.2 percentage points from the previous month, rising for two consecutive months; the expected value is 50, the previous value is 50.1. China's December non-manufacturing PMI was 52.7, which was expected to be 52, and the previous value was 52.3. Manufacturing PMI is a leading indicator that indicates an improvement in demand.

In terms of sub-indices, there is a certain difference between the two manufacturing PMIs: In the Caixin China Manufacturing PMI, the production index continues to climb in the expansion range, the new export order index rebounds slightly in the contraction range, and the employment index drops to 2021 in the contraction range. The lowest since March, showing that employment continues to be under pressure, and the finished product inventory index and production and operation expectations index fell in the expansion range, of which the latter fell to the lowest since May 2020; in the manufacturing PMI of the Bureau of Statistics, the production index and new exports The order index declined in the expansion and contraction intervals, the employment index and the finished product inventory index rose in the contraction interval, and the production and operation expectations index rebounded to the highest since the fourth quarter of 2021 in the expansion interval.

For the steel industry, the PMI of the steel industry in December 2021 was 38.7%, an increase of 2.1 percentage points from the previous month. Among the sub-indices, the new order index was 28.1%, a slight rebound of 2.2 percentage points from the previous month; the new export order index was 36.3%, which was lower than 40% for six consecutive months; the production index was 35.9%, an increase of 2.4 percentage points from the previous month. Maintained in the contraction range for 6 consecutive months; the purchase price index was 48.5%, an increase of 9.4 percentage points from the previous month; the finished product inventory index was 31.8%, an increase of 3.2% from the previous month. It can be seen from the performance of monthly data that the production enthusiasm of steel mills rebounded in December and demand improved, but export demand was weak, production costs rose, and inventories also increased, indicating that the short-term contradiction between supply and demand has intensified. Therefore, in the short term, steel has the risk of accumulating stocks, and its impact on prices is relatively small. In the short-term, steel prices are generally easy to fall and difficult to rise. Even if they rebound, the rebound space is expected to be limited.