company news about The prosperity of the steel circulation industry has expanded significantly

In March 2022, the overall PMI index of the steel circulation industry was 52.4%, an increase of 3.2 percentage points from the previous month. From the perspective of sub-indices, the 10 sub-indices that constitute the PMI of the steel circulation industry increased 7 and decreased 3. Among them, 7 indexes of sales volume, total order volume, procurement cost, financing environment, enterprise employees, trend judgment and purchasing willingness increased, while sales price increased. , Arrival speed and inventory level 3 indexes decreased.

In March, the sales volume index of iron and steel circulation enterprises was 53.4%, an increase of 8.6 percentage points from the previous month, and returned to the expansion range again; the order index was 52.7%, an increase of 9.1 percentage points from the previous month, which also returned to the expansion range. Affected by the arrival of the traditional peak season, the market speculative demand is active and the actual demand is picking up, and the domestic steel market procurement demand shows a trend of obvious recovery.

In March, the inventory index of steel circulation enterprises was 49.0%, down 4.1 percentage points from the previous month. From a regional perspective, 5 of the six major regions dropped 1 liter. Among them, the Northwest, Central and South, North China, Northeast and East China, the inventory index decreased by 10.5, 9.2, 5.6, 4.1 and 3.3 percentage points from the previous month, while the southwest region continued to rebound. The inventory index rose by 0.7 percentage points from the previous month. In terms of scale, the inventory of sample steel distribution enterprises with annual sales of more than 1 million tons, 500,000 to 1 million tons, 100,000 to 500,000 tons, and less than 100,000 tons also all declined, indicating that the domestic steel market is already in the traditional peak demand season. The social inventory of the domestic steel market has entered the stage of destocking.

From the perspective of the leading index, the purchasing intention index of the steel circulation industry in March 2022 was 51.7%, an increase of 0.3 percentage points from the previous month, and a slight rebound within the expansion range; the trend judgment index was 52.3%, an increase of 2.3 percentage points from the previous month , also rebounded to the expansion range, reflecting that the sample companies maintained a relatively optimistic attitude towards the later market.

In March 2022, the domestic steel market was affected by multiple factors at home and abroad, whether it was the sharp fluctuations in international energy prices caused by the Russian-Ukrainian war, or the Financial Committee meeting to boost market confidence, and the start of the Fed’s interest rate hike process, and Affected by the repeated domestic epidemics, the domestic steel market has shown a trend of wide fluctuations.

Supply side: In March, the domestic steel market was still in the stage of supply suppression, but due to the end of the limited production during the heating season, the production capacity release of steel production enterprises showed a trend of obvious recovery from low levels. According to the survey data of Lange Steel Network, in the first three weeks of March 2022, the blast furnace operating rate of 100 small and medium-sized steel enterprises nationwide was 74.7%, an increase of 3.2 percentage points from February. Judging from the ten-day production data of key large and medium-sized iron and steel enterprises, large and medium-sized iron and steel enterprises have maintained the stability of production capacity, but the overall situation has shown a steady recovery. According to statistics from the China Iron and Steel Association, the average daily output of pig iron in key steel enterprises in early and mid-March 2022 was 1.7661 million tons, a month-on-month increase of 0.92% and a year-on-year decrease of 7.75%; the average daily crude steel output of key steel companies was 2,004,300 tons, a month-on-month increase 2.15%, a year-on-year decrease of 9.52%; the average daily steel output of key steel enterprises was 1.9593 million tons, a month-on-month increase of 3.87% and a year-on-year decrease of 8.00%. According to the estimation of Lange Steel Research Center, the daily crude steel output in March may recover to a level of more than 2.7 million tons, of which the daily crude steel output of key large and medium-sized iron and steel enterprises will remain at about 2 million tons.

Demand side: This year, my country will focus on major national strategic deployments and the "14th Five-Year Plan" to appropriately advance infrastructure investment. The investment in the central budget is 640 billion yuan, which is higher than the 600 billion yuan and 610 billion yuan in the past two years respectively. It is mainly used for infrastructure investment such as water conservancy projects, gas pipeline renovation, energy infrastructure, and Xiongan New Area. At the same time, it is planned to arrange 3.65 trillion yuan of local government special bonds this year, which is the same as last year, mainly for follow-up financing of projects, rural construction, urban renewal and other projects that benefit the people. Since the beginning of the year, major projects in many places have started intensively, and the scale of investment has increased significantly. In the first two months, nearly 65% ​​of the special bonds invested in infrastructure-related fields, an increase of about 10 percentage points compared with last year. Under the background of moderately advanced infrastructure investment, the effect of newly added special bonds in boosting infrastructure investment has gradually emerged. From January to February, the national infrastructure investment increased by 8.1% year-on-year, an increase of 9.7 percentage points compared with the same period in 2021, the number of newly started projects increased by 1.1 times year-on-year, and the total planned investment in newly started projects increased by 62.8%. However, the actual leveraging effect will be limited by factors such as the ratio of special debt to capital, the availability of project funds, the progress of project construction, and the construction of supporting facilities.

In April 2022, the prosperity of the steel industry returned to the expansion range again, indicating that the domestic steel market has completed the transition from the off-season to the peak season, and the "strong expectation" of the policy of stabilizing growth is also accelerating into reality. The supply side will be affected by the end of the heating season and the repeated logistics restrictions due to the epidemic, showing a trend of recovery under pressure; the demand side will be affected by the pressure on the demand for real estate steel, the increasing demand for infrastructure steel, and the repeated construction progress of the epidemic. Due to the expected impact of multiple factors, the actual downstream procurement needs may be delayed. The Lange Steel Research Center predicts that the domestic steel market will show a volatile upward trend in April 2022.