The hottest iron and steel industry has establishe

2022-08-09
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The steel industry was established by the improvement trend of the month on month demand recovery

[electromechanical news] 882.6 as the weather gradually improved, the month on month demand recovery of the downstream steel industry - whether construction or manufacturing - was expected throughout the second quarter. Therefore, affected by the pick-up in month on month demand, there is a great probability that steel prices will continue to rise in April

The latest data shows that China's Manufacturing Purchasing Managers' index (PMI) was 53.1% in March, up 2.1 percentage points from the previous month, and continued to be above the critical point. This is the fourth consecutive month that the index has risen and reached a new high since April 2011. However, from the performance of PMI in recent years, PMI in March this year is still at a relatively low level in the same period, only higher than the level in 2009

Luo Baihui, Secretary General of the International Mold Association, analyzed that from the overall situation of China's manufacturing industry in March, market demand rebounded significantly, production growth accelerated, and enterprise procurement activities became active, especially in industries related to equipment manufacturing, indicating that the manufacturing economy maintained an overall growth trend

detailed data shows that the improvement of production conditions of large enterprises has become the main factor for the rebound of PMI. In March, the PMI of large enterprises was 54.3%, an increase of 3.4 percentage points over the previous month; The PMI of medium-sized enterprises was 50.4%, an increase of 0.9 percentage points over the previous month; The PMI of small enterprises was 50.9%, down 4.3 percentage points from the previous month, indicating that small enterprises are sensitive to changes in the external environment and their production and operation status is not stable

among the five sub indexes that constitute the manufacturing PMI, except the supplier delivery time index, other indexes have improved to varying degrees. Among them, the new order index rebounded most significantly, with a new order index of 55.1%, a sharp rise of 4.1 percentage points over the previous month, and above the critical point for three consecutive months, indicating a significant rebound in market demand in the manufacturing industry. The new order index of general equipment manufacturing, automobile manufacturing, electrical and mechanical equipment and other steel downstream industries rebounded sharply month on month

the production index in March was 55.2%, an increase of 1.4 percentage points over the previous month, the highest since May 2011. March is the traditional peak season of manufacturing industry. The production activities of enterprises are relatively active, and the production volume continues to grow, and the growth rate has accelerated. Among them, the automobile manufacturing industry, electrical machinery and equipment and other manufacturing industries and general equipment manufacturing industries have increased significantly. The production indexes of ferrous metal smelting and rolling processing industries have been below the critical point for two consecutive months, and the production volume of enterprises has declined continuously

from the new order index and production index, the production of the steel industry itself did not rebound significantly in March, while its downstream manufacturing industry has begun to recover from March, and the growth rate has accelerated. What is more gratifying is that the new order index rebounded significantly, especially in the automobile manufacturing and general equipment manufacturing industries, indicating that steel demand will be further released

however, due to the relatively low PMI in March this year and the largest contribution of large enterprises, the demand of small enterprises has not recovered. Previously, the initial value of HSBC PMI in China hit a four month low in March. Therefore, the recovery of downstream demand for steel may still be relatively limited

the latest index report released by the steel logistics professional committee of China Federation of logistics and purchasing shows that the PMI index of China's steel industry rose 6.5 percentage points month on month in March, approaching 50%. Accordingly, Luo Baihui pointed out, China's iron and steel industry is gradually from a phased "extremely cold trough" "The downturn in the steel market is gradually alleviating as China steps out. However, various factors that restrict the rebound of steel prices still exist.

according to relevant reports, the PMI index of the steel industry reached 49.3% in March, with a month on month rise of 6.5 percentage points. In particular, the new order index and the new export order index returned to above 50%, up 16.7 percentage points from February, with a strong rebound momentum, indicating that demand is expected to continue to pick up in the later period.

In addition, the production index of the steel industry in March was 46.5%, up 7.1 percentage points from the previous month. At the same time, purchasing activities related to production also rebounded, with the steel industry purchasing volume index rising slightly to 46%, up 1.7 percentage points from February. The raw material inventory index continued to decline, at 43.3%, down 2.4 percentage points from February. From the changes of the three indexes, the production activities of iron and steel enterprises tend to be active, the purchase of raw materials increases, and the inventory shows a decline. According to the estimation of China Steel Association, the average daily output of crude steel in China has basically recovered to the level of early October 2011 in mid March

demand rebounded, but it is still not optimistic

after a long cold winter, the steel industry has gradually felt a little spring since March. Some analysts pointed out that with the further release of seasonal demand in April, the fundamentals of the steel industry are expected to continue to improve, and the industry's profits are expected to rebound as a whole in the second quarter

from the specific data, the domestic steel price index continued to rise by 0.26% last week, and has risen steadily by 3.71% since mid February. The utilization rate of crude steel production capacity in the country increased again by 0.8 percentage points to 81.52% in mid March, and the inventory of dealers fell for seven consecutive weeks

according to the monthly data, the social inventory of steel in March fell for the first time since the high level of this year, to 18.28 million tons, down 530000 tons from February, down 3% month on month, flat year on year. The gross profit per ton of steel continued to improve month on month in March

"at present, the trend of the improvement of the industry's boom on a month on month basis is basically established, and seasonal factors are the main driving force. However, the year-on-year situation is still uncertain, because it was significantly driven by the commencement of affordable housing in the same period of 2011. "Chen Li, steel industry analyst at Huatai United Securities, pointed out.

with the improvement of the weather, the construction project operation rate increased, and the terminal demand release of the steel industry significantly accelerated in March. According to the relevant monitoring data, pay attention to the original settings in the cleaning process in February of the lunar calendar, such as the number of laps. The terminal procurement volume of Shanghai construction steel market increased by 89% month on month compared with January of the lunar calendar, and increased by 6% compared with the same period in 2011. However, one thing must be done Pay attention to that the current demand release rhythm is relatively repeated, and it is difficult for prices to rise continuously. This year, if this Japanese company is able to build a factory here, the growth rate of real estate development investment will fall year-on-year, and the completion of fixed asset investment in railway and transportation will also decline year-on-year. The demand of the main downstream industries of steel is still difficult to be optimistic

relevant people reminded that although the current demand of the steel industry has warmed up and inventories have decreased, the market environment is still relatively complex, and there are many uncertainties at the macro level. The problems we must face are much more complex than the industry fundamentals judged only based on seasonal factors. Under the current industry expectation and valuation level, we tend to believe that the expected month on month recovery of the industry cannot be used as a reason for investment, especially excess return

(source: Luo Baihui: he Minnan)

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