2025-01-09
The off-season steel market may fall into the vortex of "production reduction effect."
Yield Data:
According to statistics from the China Iron and Steel Industry Association, in late December 2024, the average daily pig iron output of key steel enterprises was 1.734 million tons, a decrease of 4.4% compared to the previous ten days, and an increase of 12.4% year-on-year; the average daily crude steel output was 1.872 million tons, a decrease of 5.3% compared to the previous ten days, and an increase of 8.7% year-on-year; the average daily steel output was 1.976 million tons, an increase of 0.4% compared to the previous ten days, and an increase of 2.8% year-on-year.
Langge Commentary:
From the monthly data of the average daily output of key large and medium-sized steel enterprises, the capacity release of large and medium-sized steel production enterprises is significantly limited, with a downward trend in pig iron, crude steel, and steel output compared to the previous period, but still showing an increase year-on-year. According to statistics from the China Iron and Steel Industry Association, in December 2024, the daily output of pig iron from key large and medium-sized steel enterprises was 1.796 million tons, a month-on-month decrease of 4.3%, with a shift from increase to decrease, and a year-on-year increase of 3.2% (see Figure 1); the daily output of crude steel was 1.958 million tons, a month-on-month decrease of 6.3%, with a shift from increase to decrease, and a year-on-year increase of 6.3% (see Figure 2); the daily output of steel was 1.957 million tons, a month-on-month decrease of 4.3%, with a shift from increase to decrease, and a year-on-year increase of 1.3% (see Figure 3).
From the annual data of the average daily crude steel output of key large and medium-sized steel enterprises, in 2024, the capacity release of large and medium-sized steel production enterprises shows a trend of "average decrease, top pressure, bottom increase"; among them, the average daily crude steel output of key large and medium-sized steel enterprises was 2.0754 million tons, a decrease of 1.6% compared to the previous year's average (2.1101 million tons); the highest daily output of crude steel from key large and medium-sized steel enterprises was 2.2483 million tons (early June), a decrease of 3.2% compared to the previous year's highest value (2.322 million tons); the lowest daily output of crude steel was 1.872 million tons (late December), an increase of 12.4% compared to the previous year's lowest value (1.6661 million tons).
Figure 1: Weekly Pig Iron Production of Large and Medium-sized Steel Enterprises
Figure 2: Weekly Crude Steel Production of Large and Medium-sized Steel Enterprises
Figure 3: Weekly Steel Production of Large and Medium-sized Steel Enterprises
From the monthly changes in blast furnace operating rates, the production release of steel enterprises shows a fluctuating downward trend. According to survey data from Langge Steel Network, in December 2024, the blast furnace operating rate of major steel enterprises nationwide was 75.5%, a decrease of 0.7 percentage points compared to the average of the previous month (see Figure 4); the average daily output of molten iron from 201 production enterprises nationwide was 2.205 million tons, a decrease of 20,000 tons compared to the average of the previous month.
Figure 4: Blast Furnace Operating Rate of Major Steel Enterprises Nationwide
From the profit situation of steel mills, since December 2024, steel mills have shown a mixed profit and loss situation for different varieties. According to calculations from the Langge Steel Research Center, as of the end of December, based on two weeks of raw material inventory, the two main steel varieties are in a mixed profit and loss situation, with rebar showing a slight profit of 40 yuan, while hot rolled steel is showing a slight loss of nearly 90 yuan.
Currently, China's economy continues to show signs of recovery, but it faces significant pressure. Although there are signs of demand recovery, the overall imbalance of supply exceeding demand remains serious. Currently, the factors promoting economic recovery and the market-driven demand contraction, along with the downward pressure on the economy, are in a critical moment of mutual struggle. According to the deployment of the Central Economic Work Conference, it is necessary to accelerate the introduction of more proactive and powerful macroeconomic policies, especially to significantly expand government investment in public goods, quickly increase enterprise orders, and drive the continuous warming of enterprise production and operation activities.
At present, the domestic steel market will be affected by multiple factors, including continuous disturbances from external factors, intensified "two heavy, two new" policies, increasingly fierce winter storage competition, and signs of weakening costs. During the deepening of the off-season effect, the domestic steel market has been significantly affected by the intertwining of three main factors: "continuous disturbances from external factors, intensified 'two heavy, two new' policies, and intensified competition among manufacturers for winter storage." In the short term, the steel market may fall into the vortex of "production reduction effect" during the off-season.。（Langge Steel Research Center, Ge Xin, 15810671409 (WeChat same number) Please indicate the source when reprinting）
Experts say the market - January 20
2025-01-20
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