Industry data:
According to data from the National Bureau of Statistics, from January to May 2024, the ferrous metal smelting and rolling processing industry achieved operating income of 3,289.12 billion yuan, a year-on-year decrease of 3.3%; operating costs were 3,191.52 billion yuan, down 2.9% year-on-year; The loss was 12.72 billion yuan.
Lange Comments:
In May, due to factors such as the macro policy increase again, the relatively stable terminal demand and the support of cost resilience, the domestic steel market showed a slight rebound in shocks, which also prompted steel mills to achieve the first monthly profit this year. According to the data released by the National Bureau of Statistics, the ferrous metal smelting and rolling processing industry made a monthly profit of 9.5 billion yuan in May, turning from a loss to a profit; Judging from the monthly profit data, the domestic steel industry lost 14.61 billion yuan from January to February, 6.75 billion yuan in March, 860 million yuan in April, and 9.5 billion yuan in May.
Judging from the data of national crude steel output and profit per ton of steel, in May 2024, domestic steel production enterprises are in a situation of "increasing production and profitability", with a loss of 29 yuan per ton of steel from January to May, a decrease of 36 yuan from January to April (see Figure 1 for details). From the perspective of operating costs, in May, comprehensive costs showed a continuous slight decline, and the proportion of operating costs in operating income from January to May was 97.0%, down 0.4 percentage points from January to April (see Figure 2 for details). From the perspective of the profit margin of steel enterprises, the profitability of steel enterprises gradually increased in May, with the cost profit margin of -0.40% and the sales profit margin of -0.39% from January to May (see Figure 3 for details).
Judging from the output data of various varieties, the structural differentiation trend of steel subdivision in May 2024 is becoming more and more obvious, the output of steel bars and pipes in construction steel shows a year-on-year decline, while the output of wire rod and plate varieties in construction steel shows a significant year-on-year increase (see Table 1 for details). Judging from the output data of the main downstream products, the steel consumption of manufacturing industries such as containers, automobiles and home appliances has increased significantly, and the demand for steel used in construction machinery, which is closely related to real estate and infrastructure, has also shown a significant upward trend (see Table 2 for details), indicating that the supply side has shown a trend of "building materials output differentiation and plate continued increase", while the demand side has shown the characteristics of "continuous improvement in steel demand for real estate and infrastructure and continued enhancement of steel demand in manufacturing".
Table 1: National output of major metallurgical products from January to May 2024
Table 2024 January-May 2024 national steel downstream industrial product output
Since June, steel production enterprises are still facing a more obvious structural contradiction between supply and demand, but due to the policy landing is still expected to exist, the off-season effect is gradually emerging, the overall decline in market transactions and the cost of maintaining resilience support and other factors, the domestic steel market has shown a volatile decline in the market, due to the impact of the gradual compression of variety profits, the production capacity of large and medium-sized steel production enterprises has shown a trend of "rising first and then falling". According to the statistics of the China Iron and Steel Association, in the first half of June 2024, the average daily output of pig iron of key steel enterprises was 1.975 million tons, an increase of 0.8% month-on-month and a year-on-year decrease of 1.8%; The average daily output of crude steel of key steel enterprises was 2.217 million tons, up 0.7% month-on-month and down 1.4% year-on-year; The average daily output of steel products of key steel enterprises was 2.109 million tons, up 1.8% month-on-month and down 0.3% year-on-year.
At present, the domestic steel market has been in the traditional demand off-season, the market transaction is in a comprehensive downward trend, due to the high temperature and thunderstorms in the northern region, and the plum rain in the southern region, so that there are obvious floods in some regions, which has obvious constraints on the release of terminal demand. The structural adjustment of the domestic steel market is still in the process of deepening, especially the adjustment of the supply and demand structure of building materials is the most obvious, the rebound of wire rod production in a single month also shows that the transformation and upgrading of domestic construction steel production enterprises will mainly aim at the field of rod and wire, and domestic plate production enterprises will continue to enjoy the "policy dividend", the structural transformation and upgrading of the domestic steel industry has also officially fallen into the adjustment of relevant varieties, and the quality of variety profits will also determine the living space of steel enterprises in the future. (Lange Iron and Steel Research Center, Ge Xin, please indicate the source for reprinting)