On the whole, the price of the national building materials market was mixed in May. Under the good trend of the national building materials inventory continuing to decline slightly, the pressure on the supply side has declined, the confidence of market traders has been supported, the willingness of steel mills to raise prices is strong, and the mainstream transaction price of spot has increased by about 100 yuan; At the same time, with the release of macro good news, the strong rise in raw material futures has driven the snail to follow, the overall market transaction sentiment has improved compared with the previous month, the terminal demand has been gradually released, and the trading volume has increased slightly. However, near the end of the month, the futures consolidation shock was weak, except for the spot prices in North China were relatively stable, the mainstream spot transaction prices in other regions fell significantly and finally tended to run smoothly; The transaction volume of building materials in the country has decreased to varying degrees, and there is more rain in the southern region, and the demand performance is poor; Supply and demand in North China were weak, and the overall transaction decreased from the previous month.
In January and May, the domestic construction steel market fluctuated strongly
According to the monitoring data of Lange Steel Cloud Business Platform, as of May 31, the comprehensive price of construction steel in China was 4,047 yuan (ton price, the same below), up 0.3% month-on-month and 2.3% over the same period last year. The comprehensive price of the high line was 4,026 yuan, up 3 yuan from the previous month; The comprehensive price of rebar was 3,835 yuan, up 27 yuan from the previous month (see Figure 1 for details).
Figure 1 Trend chart of the average price of domestic construction steel
Second, the operating rate of blast furnaces of major steel enterprises in the country has rebounded
Figure 2 Trend chart of blast furnace operating rate of major domestic steel enterprises
Blast furnace operating rate: On May 30, Lange Iron and Steel Network released the blast furnace operating rate data of major iron and steel enterprises in the country: 79 steel mills in 201 production enterprises in the country have a total of 124 blast furnaces suspended, and the total volume of the suspended blast furnace is 130,650 cubic meters, a decrease of 10,078 cubic meters from the previous month, and the blast furnace operating rate of major iron and steel enterprises is 74.98% by volume, an increase of 0.78% from the previous month. The average daily output of hot metal was 2,199,700 tons, an overall month-on-month increase of 18,600 tons;
Judging from the data, the daily output of molten iron of national steel enterprises has increased compared with the previous month, and the daily output of molten iron has increased slightly due to the resumption of production and production increase of some blast furnaces. Although the profitability of steel mills is acceptable after the first round of coke lifting and landing, the willingness to increase production and resume production is enhanced, but the high-priced shipment of building materials is weak, the profit is not high, and the steel mills mainly produce other steel products, maintaining the gradual reduction of the national building materials inventory.
Third, the domestic construction steel output fell year-on-year
Figure 3 Monthly trend chart of domestic construction steel production
According to the National Bureau of Statistics, in April 2024, the output of steel bars in mainland China was 16.343 million tons, a year-on-year decrease of 21.7%; From January to April, the output of steel bars in the mainland was 66.306 million tons, a year-on-year decrease of 12.8%. In April 2024, the output of wire rod (wire rod) in mainland China was 10.753 million tons, a year-on-year decrease of 11.4%; From January to April, the output of wire rod (wire rod) in mainland China was 42.883 million tons, a year-on-year decrease of 7.1%. Relatively speaking, although the output of building materials decreased slightly from January to April, the profits of steel mills were restored in May, and some steel mills had plans to resume production and increase production of building materials production lines.
Fourth, domestic building materials steel mills and social inventories continued to decline
Figure 4 National building materials social inventory trend chart
Fig.5 Inventory of steel and building materials of 81 sample companies in China
The overall social inventory of steel in the country still maintains a downward trend, but the decline in building materials inventory has slowed down. According to the monitoring data of Lange Steel Cloud Business Platform, on May 31, the national steel social inventory index was 126.1 points, down 10.55% from the previous month and up 3.05% from the same period last year; Among them, the social inventory index of building materials was 144.8 points, down 17.78% from the previous month and 9.76% from the same period last year; The social inventory of building materials in key cities across the country was 5.9556 million tons, a decrease of 1.6415 million tons or 21.6% from the previous month.
Fifth, the downstream demand is still weakening in the short term, and it is difficult to make a big improvement
Infrastructure construction: From January to April, infrastructure investment (excluding electricity, heat, gas and water production and supply) increased by 6.0%. Among them, the investment in water conservancy management increased by 16.1 percent, the investment in public facilities management decreased by 1.0 percent, the investment in road transport increased by 0.7 percent, and the investment in railway transport increased by 19.5 percent. Infrastructure data remained at a relatively good level, achieving steady growth. In addition to the investment in the public facilities management industry and the road transport industry, there has been a substantial increase, which has a bottom-up effect on the follow-up demand for building materials.
Real estate market: From January to April, the national real estate development investment was 3,092.8 billion yuan, a year-on-year decrease of 9.8%; Among them, residential investment was 2,339.2 billion yuan, down by 10.5 percent.
From January to April, the construction area of real estate development enterprises was 687544 million square meters, a year-on-year decrease of 10.8%. Among them, the residential construction area was 480647 million square meters, a decrease of 11.4%. The area of new housing construction was 235.1 million square meters, down by 24.6%. Among them, the area of new residential construction was 170.06 million square meters, a decrease of 25.6%. The area of housing completions was 188.6 million square meters, down by 20.4%. Among them, the area of residential completions was 137.46 million square meters, down by 21.0%.
From January to April, the sales area of newly built commercial buildings was 292.52 million square meters, a year-on-year decrease of 20.2%, of which the sales area of residential buildings decreased by 23.8%. The sales of newly built commercial buildings were 2,806.7 billion yuan, down by 28.3 percent, of which the sales of residential buildings fell by 31.1 percent.
From January to April, the funds in place for real estate development enterprises were 3,403.6 billion yuan, a year-on-year decrease of 24.9%. Among them, domestic loans were 558.3 billion yuan, down by 10.1 percent; the utilization of foreign capital was 900 million yuan, down by 46.7%; self-raised funds were 1,173.6 billion yuan, down by 10.1 percent; deposits and advance receipts were 1,000.2 billion yuan, down by 37.2 percent; personal mortgage loans were 495.3 billion yuan, down by 39.7 percent.
The overall real estate data is still poor. Whether it is the construction area, the newly opened area or the completed area, there is a significant downward trend; Funding is still the biggest problem, and funds have continued to decrease in recent months, which seriously restricts the collection of projects under construction and the subsequent start of new construction. As a result, it can still be seen from the infrastructure real estate data that the demand for building materials in real estate continues to be weak, and the long-term role of infrastructure in boosting the demand for building materials is limited, and the overall demand is still difficult to improve fundamentally in the short term.
Sixth, the market outlook forecast
Looking forward to June, some cities have entered the high temperature and rainy season, especially the construction sites in the southern region have been partially affected, which has a certain impact on the release of market terminal demand, and the pressure on social inventory digestion has increased. From the perspective of supply, after two rounds of coking coal reduction, the production cost of steel mills has decreased, the profit of building materials has improved slightly, and the willingness of steel mills to resume production of building materials has increased; Although the output and capacity utilization rate of steel mills in North China were at a low level in May, news of increased production and resumption of production has been released one after another; In South China, the output of steel mills increased significantly in May, and the social inventory increased slightly, but the national steel mills and social inventory are now in a slight downward trend, and the pressure on the supply side is not large for the time being. From the perspective of the market, the price of futures has risen rapidly due to macro news, and the terminal is actively purchasing, and the transaction is acceptable; Towards the end of the month, the futures volatility was weak, the market trading sentiment weakened, the spot price fell to varying degrees, and the total trading volume decreased slightly compared with the previous month. Now the price of raw materials has fallen, the production enthusiasm of steel mills has increased, but the release of demand is less than expected, and it is predicted that social inventories will begin to accumulate in June, which is not conducive to the rise in spot prices. Basically, on the whole, it is expected that the domestic construction steel market will fluctuate and fall in June. (Lange Steel)