The Central Economic Work Conference, which ended on December 18, 2020, listed "persistent on expanding domestic demand as a strategic basis" as a key task in 2021, and a series of benefits for steel demand will be formed around "expansion of domestic demand". How to judge the operating status of the industry in 2021?

"In 2021, the prices of raw materials and steel will run at a high level, and the overall market operation will fluctuate at a high level, and this state will continue throughout the year." Shen Wenrong judged.

The above judgment is mainly based on two aspects:

First, the price of raw materials, especially mineral powder, will remain high. The foreign monopoly on the mineral powder required for China's steel production will result in high raw material prices in 2021 or even 2022.

"The price of raw materials is at a high level at the beginning of 2021. Although there are fluctuations, they will not fall all the way. Most of the time, the price of ore varies from US$30 to US$40/ton, and the maximum range may reach US$50/ton. The trend of the curve is high and fluctuates. The average annual price of mineral powder will fluctuate between US$20 and US$30/ton. The average price in 2019 is US$93/ton, and the average price in 2020 is US$109/ton. It is expected that the average annual price in 2021 The price will be higher than 2020, at US$120~US$130/ton; the high is about US$160/ton, and the low may fall below US$120/ton." Shen Wenrong analysis.

Second, the demand for steel will not decrease, or even increase. China's economic development continues to improve, and steel demand and crude steel output will not decline, which requires a large amount of imported raw materials. At present, the epidemic in many countries has not yet ended, and the epidemic in China has been well controlled and economic development is relatively stable.

"Some people predict that China's economy will grow by 7% to 8% in 2021. We are conservative and achieve a growth of 5% to 6%, which is also higher than the growth rate in 2020." Shen Wenrong analysis.

"However, no matter how fast the economic growth rate in 2021, China's steel industry will be able to meet domestic steel demand. However, when the domestic market price is high, steel companies are more inclined to sell steel domestically; when foreign countries are affected by the epidemic, steel When the price is low, we will reduce exports and choose to import." He believes. Of course, this also means that if steel companies in other countries resume production, it will have a greater impact on the domestic market, because if the international market price is higher than the domestic market, the domestic market price will also rise.

"In addition, the situation at the beginning of 2021 is different from that at the beginning of 2020." Shen Wenrong pointed out. He analyzed that during the epidemic in early 2020, a large number of factories had a holiday during the Spring Festival, which affected steel consumption. In 2021, the state encourages and recommends that employees stay at their unit location as much as possible during the Spring Festival. Therefore, they will not encounter the situation that employees cannot reach their jobs after returning to their hometowns. Down-season steel users will not be short. This means that the production of various industries in the first quarter of 2021 will not be restricted by the epidemic, and the non-stop work during the Spring Festival will be more able to stabilize production and steel demand. At the beginning of 2020, the downstream was affected by the epidemic and failed to resume production in time, and the steel plant encountered a large inventory backlog. However, this will not happen at the beginning of 2021. Although the peak inventory accumulation still exists, it will be lower than that at the beginning of 2020, and may be close to 2017 and 2018, or even lower.

"In general, the trend of operation in 2021 will depend on the recovery of global production, and we must also grasp market trends. If grasped properly, the overall benefits in 2021 will not be too bad and will be better than 2020; if grasped incorrectly, then Not as good as 2020. Therefore, the overall situation in 2021 will be volatile and fluctuating. Starting from the end of 2020, the steel market price has been at a high level, and it may fall back in February and March 2021. When the economy recovers after the epidemic, there is demand for steel abroad. It may rise." Shen Wenrong judged.

Regarding the situation of billet discounting crude steel net imports for several consecutive months in 2020, what trend will it take in 2021?

"In 2021, there is a 70-80% probability that steel exports will increase on the basis of 2020, but it cannot return to the level of 2019. At present, from the perspective of steel companies, except for steel companies in individual countries that are subject to production restrictions Most steel companies are gradually recovering to the level before the epidemic.” Shen Wenrong analyzed.

According to data from the General Administration of Customs, my country’s steel exports in 2019 were 64.29 million tons, and in 2020 it is expected to be around 50 million tons.

Shen Wenrong believes that in 2021, although the epidemic situation in Europe and the United States and other countries will still exist, they need to continue to develop their economies, otherwise the survival of the people will be problematic. In addition, after exploration in 2020, European and American countries will adopt some effective countermeasures, such as learning from China’s experience and practices. Therefore, if the foreign epidemic is properly controlled, the degree of impact will be less than in 2020. Even if there is a new epidemic in 2021, other countries will be prepared to resume production while controlling the epidemic.

"On the whole, international steel demand in 2021 will not be less than 2020." Shen Wenrong believes.