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2023 steel market outlook

2023-10-12

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1
Steel demand is strong inside and weak outside

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The mainstream view is that the global economy will decelerate significantly in 2023, and even fall into the risk of economic recession, of which the risk of economic recession in Europe and the United States is greater. Under this large pattern, the world's total commodity demand has weakened, including the total steel consumption and the total demand for steel products. Affected by this, China's steel exports in the New Year, especially the indirect exports of steel driven by the export of mechanical and electrical products, its substantial growth situation is no longer. From January to November 2022, the national export of mechanical and electrical products increased by 5.6% (in dollar terms), of which automobile exports increased by 73.1%. It is expected that the export growth rate of mechanical and electrical products in 2023 will fall below 4%, and the export growth rate of steel consumption products such as automobiles, construction machinery, mechanical equipment, and home appliances will also fall more, showing a weak growth pattern as a whole.

On the other hand, China's measures to stabilize growth have gradually become effective and new measures to stabilize growth have been added. In 2023, the national infrastructure investment has maintained a high growth rate, and the year-on-year growth rate in some months has maintained a double-digit level. In particular, real estate investment is expected to continue to improve, a significant improvement from the sharp decline in 2022. In addition, the ' epidemic ' has significantly weakened the constraints on economic activities and consumption, which makes the national macro economy will accelerate more in 2023. It is expected that the annual economic growth rate (GDP) is expected to exceed 5%, thus laying a solid foundation for domestic demand for steel. The impact of the above two aspects will make the steel demand in the New Year show a pattern of internal strength and external weakness. Hainan profile Wholesale

2

Demand structural building materials are better than production materials

In 2023, further play the key effect of investment on stable economic growth, infrastructure investment, equipment manufacturing investment, real estate investment, private investment, overseas investment and other comprehensive efforts, the country's overall fixed asset investment will reverse the weak growth situation of the previous year, resulting in a relatively large increase in the demand for construction steel. At the same time, the domestic and foreign manufacturing PMI index weakened simultaneously, especially the world economy significantly slowed down, and even may fall into recession, for China's mechanical and electrical products exports have a negative impact, will weaken the domestic production of steel demand, so in the New Year China's steel demand in the major structure, construction materials will be better than production materials.

3

The amount of steel resources is relatively stable

The steel inventory level in 2022 has decreased significantly, and the adjustment effect of the market inventory reservoir has weakened. Lange Steel network market monitoring data show that as of December 23, 2022, the national steel social inventory index was 86.1 points, down 6.7% from the same period last year. Among them, the social inventory index of building materials was 94.1 points, down 7.9%.

According to the data, the statistical output of crude steel in 2022 fell by about 2% year-on-year. Under the background of stable release of domestic demand and continued contraction of imports, it is expected that the space for crude steel production to continue to decline in 2023 is not very large. It is expected that the national statistical output of crude steel in 2023 will reach 1.01 billion tons, with a year-on-year change of about 1%.

The secondary channel of steel resources in 2023 - steel imports will continue to be at a low level. The main reason is that in 2023, the steel supply chain in some regions of the world except China will be affected by energy shocks; The second is the further strengthening of China's steel price competitiveness. It is expected that the national steel imports in 2023 will be about 10 million tons, roughly equivalent to the previous year's level, and even continue to shrink.

4

Steel prices wide volatility situation is still

In 2023, the fundamentals of the steel market still coexist with bearish factors, and there is no overwhelming unilateral tendency, which determines that the steel market will continue to fluctuate widely in the New Year. It is expected that the trough of the annual steel ton price and the peak difference of about 1,000 yuan.

From the perspective of the month-on-month situation throughout the year, if there is no large-scale winter storage at the end of this year, there will be a wave of rising prices in the spring, and then fall back. The price level in the first half of the year is higher than that in the second half.

From the perspective of different varieties, construction materials will be better than production materials.

It is worth noting that because the supply and demand situation of the steel market in 2023 is expected to be better than that of the previous year, the average price level of steel is expected to be higher than that of the second half of 2022, and the overall price center is basically the same as that of the whole year of 2022.

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2023 steel market outlook

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