In February, the PMI of the national steel industry rebounded slightly to a final value of 51.5%
In February 2021, the PMI of China’s steel industry was 51.5%, an increase of 8.7 percentage points from the previous month. In terms of sub-indices, the ex-factory prices, output, new orders, backlog orders, and other indices have rebounded significantly. Raw material purchase prices, domestic and foreign raw material purchases, and finished material inventories continued to rebound slightly, indicating that the domestic steel industry’s supply and demand situation was positively improving in February.
Specifically, in February, the market ushered in the Spring Festival holiday, and steel demand entered a freezing period. After the holiday, the domestic steel market is welcoming a “good start”. Under the expected growth and inflation, the market sentiment is positive and optimistic, and the prices of various varieties generally rise by more than 300 yuan/ton. In the face of March that is about to enter, downstream demand will continue to recover. Whether steel prices can continue to rise, the author analyzes and interprets the various PMI indexes below.
As of February 26, the Myspic domestic steel price composite index was 175.32, a month-on-month increase of 7.86%, an increase of 32.69% compared to the same period last year; the domestic long product index was 193.53, a month-on-month increase of 7.80%, and an increase of 29.73% compared with the same period last year; thread The steel index was 186.62, a month-on-month increase of 7.71%, and a year-on-year increase of 30.57%.
The national construction steel prices rose sharply in February. As of the 26th, the average market price of 20mmHRB400 rebar in 24 major cities across the country was 4688 yuan/ton, a month-on-month increase of 338 yuan/ton, and a year-on-year increase of 1021 yuan/ton.
2. The supply of steel mills fell during the Spring Festival and the pace of resuming production after the holiday accelerated
In February, the output index of steel mills in the national steel industry rebounded by 10.3 percentage points from January to a final value of 47.5. Specifically, in February ushered in the Spring Festival holiday, steel mills planned to overhaul and reduce production, and output fell slightly throughout the month. However, after the holiday, market prices rose sharply. At the same time, local Chinese New Year is advocated in various places this year, and steel mills quickly resumed work after the holiday. Produce.
From the perspective of related indexes, the ex-factory price index of finished products this month rebounded by 28.0 percentage points to 95.9, and the finished product inventory index of steel mills continued to rise by 2.0 percentage points to 72.5. This month, the raw material purchase price index rebounded by 3.2 percentage points to 87.5, the domestic raw material purchase volume index rebounded by 1.9 percentage points to 60.2, and the foreign raw material purchase volume index rebounded by 4.3 percentage points to 49.0.
n terms of related data, Mysteel estimates that the national average daily output of crude steel in February was 2,793,900 tons, a decrease of 96,200 tons from January. In terms of varieties, among the 139 building materials manufacturers monitored by Mysteel on February 26, the actual weekly output of rebar was 3.1892 million tons, a decrease of 147,500 tons from January 29, and the actual weekly output of wire rod was 1,377,300 tons, compared with January 29.
A daily decrease of 27,500 tons; the actual weekly output of the 37 hot-rolled coil production enterprises monitored was 3,275,400 tons, a decrease of 92,000 tons from January 29; the 29 cold-rolled coil production enterprises monitored had an actual weekly output of 847,500 tons Tons, a decrease of 24,300 tons from January 29. For March, the pace of resumption of production at steel mills after the holiday has been significantly faster than in previous years, and steel production is expected to rebound significantly in March.
3. After the holiday, steel mills actively resume production, and the enthusiasm for replenishment of raw materials is average
The raw material purchase price index in February was 87.5%, a slight increase of 3.2 percentage points from the previous month, and was above the line of prosperity for five consecutive months. As of February 26, Mysteel data showed that the Myipic composite index was 173.9, up 3.82% month-on-month and 77.99% year-on-year. Among them, imported mines rose 3.21% month on month and domestic mines rose 4.79% month on month.
As of February 26, Mysteel counted the iron ore inventory of 45 ports across the country at 126.4473 million tons, an increase of 1.4402 million tons from the previous month, and the average daily port volume dropped from 3.0407 million tons in the previous month to 2.9497 million tons. According to Mysteel’s statistics, the national steel mills imported iron ore inventory was 115,506,900 tons, a month-on-month decrease of 7,451,100 tons.
During the Spring Festival this year, the output of steel mills was higher than that of previous years, and the iron ore inventories in the mills fell sharply. However, the steel mills were more enthusiastic about replenishing raw materials after the holiday. The raw material inventory index in February was 45.9, unchanged from the previous year.
Throughout February, the demand for steel during the Spring Festival holiday entered the freezing period, and the price before the holiday was basically stable. After the holiday, the domestic steel market welcomes a “good start” under the expected growth and inflation. The prices of various varieties have generally risen by more than 300 yuan/ton, and the market sentiment is positive and optimistic. For the upcoming March, the domestic steel market will show a trend of dual growth in supply and demand, and the fundamentals are generally improving.
On the supply side, steel prices rose sharply after the holiday, and the profitability of steel mills has improved. At the same time, local Chinese New Year is promoted this year. The resumption of work and production is significantly faster than last year.
According to research, the production situation of long-term enterprises has been slightly saturated in the near future. Short-process enterprises will focus on resuming production, and the supply of steel mills will rebound significantly in March. In terms of demand, some major projects returned after the holiday started ahead of schedule, and after the Lantern Festival, major downstream terminals in various regions will resume work one after another.
It is expected that steel demand will recover significantly in March. But on the other hand, firstly, the raw material end coke price started a new round of downward adjustment after 15 rounds of increase, and it is expected to be adjusted down by 3-4 rounds; Secondly, after the holiday, steel mill inventories gradually shifted to the market, and the overall market inventory increased significantly.
In some areas, inventory peaks exceeded last year. In addition, prices are currently experiencing sharp increases. In the later stage, you need to be aware of the adjustment pressure of market profits. On the whole, it is expected that the domestic steel industry PMI may continue to rise in March, and domestic steel prices may show a trend of high and wide fluctuations.