At the time when the National Two Sessions were held, the steel market experienced a turbulent adjustment after experiencing a surge. Judging from the operating conditions of the steel market before and after the two sessions of the country over the years, in addition to the special factor of the new crown pneumonia epidemic in 2020, from 2016 to 2019, one month before and after the two sessions, the steel market showed an upward trend. It can be seen from the National Two Sessions this year that the macro environment facing the steel market will remain stable and improving.

One is that the overall market demand this year has a large room for growth. According to this year’s government work report, my country’s GDP growth target for 2021 is "over 6%." Different from the past, the word "above" has been added this time, giving more flexibility. Historically, when the GDP growth rate remained high, the crude steel output growth rate also remained high; when the GDP growth rate declined, the crude steel output growth rate remained at a low level. In 2020, my country's GDP will exceed 101 trillion yuan, and the per capita GDP will exceed 72,000 yuan. If calculated according to the GDP growth rate of at least 6% in 2021, then the GDP will increase by 6.06 trillion yuan year-on-year. Calculated on the basis of 100 kilograms of steel consumption per 10,000 yuan of GDP, a 6% GDP growth rate will increase the demand for steel by more than 60 million tons. Based on this, it is expected that the domestic steel market will maintain a good demand growth this year.

The second is that "policy does not make a sharp turn" to give the steel market sufficient room for digestion. An obvious feature of this year's report is that "macro policy'does not make a sharp turn' and maintains appropriate support for the economy." In terms of finances, the fiscal deficit rate is around 3.2%, and the deficit is 3.57 trillion yuan. The issuance of anti-epidemic special treasury bonds will no longer be issued, which is basically in line with expectations. Although the overall fiscal policy is slightly smaller than in 2020, it is significantly higher than in 2019 before the outbreak. In addition, due to the impact of insufficient local government project reserves in 2020, about 1 trillion yuan of special debt funds will remain in place. Together with the 3.65 trillion yuan planned for this year, there will actually be 4.65 trillion yuan of special projects in 2021. Debt funds are available, which is expected to promote a strong rebound in infrastructure.

The investment of special debts is still focused on infrastructure construction and the renovation of old communities. The report proposes that this year plans to renovate 53,000 old communities, which is a significant increase compared to 19,000 in 2019 and 39,000 in 2020.

In terms of monetary policy, the report emphasizes the proper handling of the relationship between economic recovery and risk prevention, and emphasizes that serving the real economy should be placed in a more prominent position, so as to avoid excessive tightening force from impacting economic recovery. Based on the work report of local governments this year, stabilizing infrastructure and expanding domestic demand will still be the focus of work in the future. Infrastructure construction, rail transit construction, and further improvement of the industrial chain and supply chain will all provide room for growth in steel demand.

Third, the demand in the real estate industry will remain stable and improving. In addition to the positioning of "housing to live without speculation" in this year's report, "solving outstanding housing problems in big cities" is a special emphasis this year. In 2020, the national real estate development investment reached 14.14 trillion yuan, a year-on-year increase of 7.0%, exceeding the economic growth rate and crude steel output growth rate in 2020, and staying in a healthy and reasonable range, reflecting the real estate industry’s “steady improvement and moderate growth rate” "specialty. The author predicts that the real estate growth rate in 2021 will be between 5% and 10%, which is not expected to be lower than the GDP growth rate.

Fourth is to expand domestic demand as a strategic basis to provide protection for steel demand. The key to expanding domestic demand is to strengthen and optimize manufacturing. This year's report mentioned the manufacturing industry many times, and gave greater incentives to advanced manufacturing to promote the consumption of bulk commodities. The report proposes to rely on innovation to promote the high-quality development of the real economy and cultivate new growth momentum; continue to implement the 75% policy of enterprise R&D expenses, increase the percentage of deductions for manufacturing enterprises to 100%, and use tax incentives to encourage enterprises to increase R.

In addition to the resumption of growth in domestic demand, foreign trade has gradually recovered to a better level. In the first two months of this year, the total value of my country's trade with ASEAN reached 786.2 billion yuan, an increase of 32.9% year-on-year, accounting for 14.4% of my country's total foreign trade value. In terms of steel exports, 10.14 million tons of steel products were exported in the first two months, a year-on-year increase of 29.9%. This indirectly indicates that foreign demand has improved and to a certain extent eased the pressure on domestic resources.

Generally speaking, the author expects that under the favorable drive of the National Two Sessions, the steel market will operate in a better macro environment, and steel prices are expected to remain high.