At present, this should be the traditional peak season for steel demand, but market demand is still weak. Whether the domestic steel market demand will fully recover in the second quarter has caused concern. Recently, Ren Zhuqian, assistant to the president of Shanghai Steel Union, explained the recent fundamentals of the steel industry during the online metal week event of the "Industrial Training Base" held in the last issue.

Infrastructure construction will drive future demand

In terms of output, according to experts, China's crude steel and steel production in 2019 were 992 million tons and 1.228 billion tons, up 8.3% and 9.8% year-on-year, hitting a record high; January-February this year, China's crude steel and steel production They were 155 million tons and 167 million tons, respectively, an increase of 3.1% and a decrease of 3.4% from the same period last year.

From the perspective of inventory changes, Ren Zhuqian said that the supply and demand of the steel industry was obviously affected by the epidemic. The crude steel output continued to decline in February, and most short processes and electric arc furnaces were shut down until March 1, superimposed blast furnace maintenance, crude steel output continued decline.

According to the reporter of the Futures Daily, due to traffic restrictions caused by the epidemic, domestic steel mills stocks surged in February-March, forced by the pressure of sparse storage, some steel mills added maintenance and production reduction in February, but the overall output reduction is not strong. Experts said that with the gradual solution of transportation problems, the operating rate of blast furnaces and production lines in steel mills began to rise from March to April. After the outbreak of the epidemic, the accumulation period of domestic steel products was significantly prolonged. The inventory of the five major varieties reached a historical peak in mid-March. At present, the inventory has begun to decline but is still at a high level.

In the opinion of experts, with the effective prevention and control of the domestic epidemic, coupled with the arrival of the peak consumption season and the decline in scrap prices, it is expected that the operating rate of domestic blast furnaces and electric furnaces will continue to rebound in the future, so the pressure on domestic steel resource supply is greater.

Ren Zhuqian believes that various markets, warehousing and logistics have resumed work since late February, and the market has continued to oscillate downward due to macro and fundamental impacts. With the daily turnover of building materials returning to 150,000-200,000 tons, the price at the bottom of March 10 has The price has rebounded, but the contradiction between demand and supply is still obvious. The price has appeared again and again, with strong long products and weak plates. The terminal warehouses in East China have begun to recover gradually this week, but some warehouses may directly face the impact of public health incidents, and the time for resumption of work is difficult to clarify and continues to be delayed.

In terms of demand, Ren Zhuqian said that the spread of the epidemic has a great impact on the global economy, and most institutions predict that the global economic growth rate will drop by about one percentage point compared with 2019. At the same time, this also has a negative impact on the domestic economy. As an important link in the global supply chain, China's reverse globalization brought about by the epidemic also has a further impact on future economic development.

"It is expected that China's crude steel demand will be reduced in 2020 compared with 2019, and the reduction in consumption is mainly concentrated in the real estate industry and automobiles, home appliances and other industries." Experts said that in order to cope with the downward pressure on the economy, the country introduced tax cuts and fee reductions. A series of policies. Demand for real estate steel in 2019 is expected to decline this year due to a year-on-year decrease in land purchase area of 14.2% and a reduction in new construction area. The automotive and home appliance industries are affected by foreign epidemics and are expected to show negative growth. Infrastructure-related industries took the lead in recovery, and many provinces announced major project investment lists, and infrastructure investment will accelerate. As of March 31, 1.0828 billion yuan of new special bonds have been issued in various places, accounting for 84% of the advance payment. This will promote the rapid start of infrastructure projects after the epidemic has been alleviated. Infrastructure construction investment is the main driving force for steady growth in 2020, and accelerating the resumption of production and production of enterprises is the most important task at present.