Industry news

1.Review of steel price trends in 2021

In 2021, the domestic construction steel market price will show a trend of "two ups and two downs". The trend of the whole year can be divided into four bands. Specifically, the first stage is from the Spring Festival to the first ten days of May, which is reflected in the global economic recovery and the concentrated release of steel demand after the year, superimposed on the influence of monetary easing policies and speculation. Commodities rose continuously, and steel prices continued to rise; especially after the "May Day", the policy side proposed to reduce steel production, the capital market had strong expectations of tight supply and demand, and the spot price of steel also climbed to an all-time high; the second The stage is from mid-May to the end of June. Under the pressure of the State Council’s policy of guaranteeing supply and stabilizing prices, the speculative speculation bubble was squeezed, and spot steel prices fell sharply; the third stage was from early July to early October. Under the environment of “control”, the reduction of production in various places is true, while the price of raw materials continues to rise, the cost support role becomes stronger, and the supply and demand structure is out of balance again, driving steel prices to rise twice; the fourth stage is from mid-October to the end of December. As peak season demand was falsified and costs collapsed due to falling raw material prices, steel prices pulled back sharply and bottomed out in December. According to statistics, the average annual steel index in 2021 is 5,300 yuan, while the average annual steel index in 2020 is 3,980 yuan, and the average price has risen sharply by 1,320 yuan/ton.

2.Steel Market Demand, Supply and Cost Analysis 2022
Demand: In 2022, the domestic macroeconomic policy will set the tone for stable growth. In order to achieve the goal of stable growth, a proactive fiscal and relatively loose monetary policy will be implemented. Infrastructure investment may become one of the most important means for stable economic growth next year. Real estate policy The main keynote is still to live in and not to speculate on, but the suppression policy has slowed down significantly. Since November 2021, the bank's capital supply to real estate and the speed of lending have both increased and accelerated. The steel consumption of infrastructure and real estate accounts for more than 60% of the total. In addition to advancing infrastructure and stabilizing real estate, it is expected that the steel demand of downstream enterprises will not drop too much next year.

Supply: Carbon neutrality and carbon peaking are inevitable choices for my country's economic development. From the perspective of steel industry policies, steel supply in 2022 will still be affected by the policy of double reduction in energy consumption. Steel production reduction is still an important industry policy. There is a lot of downward pressure on the growth rate, and there is no clear policy to limit production. According to the calculation of the Metallurgical Planning Institute, the crude steel output in 2021 will be 1.040 billion tons, a year-on-year decrease of 2.3%, and the crude steel output in 2022 will be 1.017 billion tons, a year-on-year decrease of 2.2%. However, from the current statistics, it is difficult for crude steel output to reach 1.04 billion tons in 2021, and it is expected to be between 1.015-1.025 billion tons. Crude steel output in 2022 is estimated to be around 1.003 billion tons if it is estimated that the output will drop by 2.2%.
3.Prediction of steel price trend in 2022
For 2022, it is expected that the steel price will remain within a certain price range and fluctuate mainly in the "W" shape, and the average price throughout the year will move down, mainly for the following reasons: First, the political bureau of the Central The meeting clarified that the economic stability in 2022 will be the top priority, and progress will be made while maintaining stability. In 2022, the difference in economic recovery at home and abroad may be significantly narrowed, and the supply chain mismatch will also be reduced; secondly, on the demand side, the country will continue to adhere to real estate The policy of only living and not speculating, in order for the real estate market to truly serve the livelihood issue of housing, the area of newly acquired land will show a downward trend; finally, the policy of restricting production will continue, and the supply level will not change much. Macro-control will continue. To sum up, it is expected that the steel price will mainly run in the "W" form next year, and the annual average price will move down. .

Cost: In 2022, the iron ore supply situation will tend to be loose, and the price of imported ore will continue to fall; the tight supply of coke and coking coal will gradually ease, and the high price situation will be improved. The weak price of steel raw materials will decline, and the support on the cost side of steel production will be lowered in 2022. In terms of steel production profits, the average profit per ton of steel rebar in 2022 will be 450-620 yuan/ton, an increase of 5% year-on-year; 3%.