According to the latest report released by the China iot Steel Logistics Professional Committee on December 31, the domestic steel industry PMI in December 2023 was 46.0%, down 2.2 percentage points from the previous month. Sub-index changes show that the off-season effect of the steel industry has appeared, market demand has declined, and steel production has declined correspondingly, enterprise inventories have increased, raw material prices remain high, and steel prices have been high and volatile.
The report expects that in January next year, the demand side of the steel market will continue to contract, steel production will further decline, raw material prices will fall, and steel prices will decline slightly.
The decline in demand in December, a traditionally slow month for the steel industry, was also expected. However, the report also mentioned that this year’s large-scale blizzard cold wave weather has caused the temperature to plummet in many places, but also accelerated the pace of demand decline in the steel market, and the overall demand has entered a seasonal recession. The new orders index was 43%, down 6.7 percentage points from the previous month, ending three consecutive months of month-on-month increase.
The enthusiasm of steel producers also declined in December. The report pointed out that since December, the steel market demand has weakened, steelmaking profits have decreased, and the production willingness of enterprises has declined accordingly, while the heating season limited production policy has gradually been strict, which has a certain inhibitory effect on steel production. The production index was 45.8%, down 2.2 percentage points from the previous month.
According to China Steel Association statistics, in early December key statistics of steel enterprises daily crude steel 1,931,600 tons, down 4.19%, daily pig iron 1,814,300 tons, down 3.21%, daily steel 1,912,500 tons, down 12.26%. By the middle of the year, the daily output of crude steel was 192.89 million tons, down 0.14% from the previous month, the daily output of pig iron was 1.814,600 tons, up 0.01% from the previous month, and the daily output of steel was 1.961,300 tons, up 2.55% from the previous month. Production in the middle of the first ten days of a slight recovery, but the extent is much smaller than the previous ten days of the sequential decline. Overall, steel production showed a decline in December.
However, raw material prices are still stable and strong, and steel costs remain high. The report shows that the purchase price index is 76.5%, although the sequential decline of 0.5 percentage points, but the index is still at a high level, indicating that raw material prices continue to maintain a rapid rise.
Steel prices rose first and then fell. The report said that overall, the annual steel price index showed a V-word trend, and the current steel price fell by about 100 yuan/ton from the beginning of 2023, but there is still a more obvious rise from the mid-year level.
