[Article Introduction]
In the first three quarters of 2022, the price of construction steel first rose and then fluctuated and fell, and the overall price center of gravity moved down. The main driving factors affecting the trend of steel prices are the policy driving in the first quarter to fundamental driving in the second and third quarters. In the later stage, demand is still the main driving factor affecting the trend of steel prices. Under the background of limited release of demand, steel prices are expected to fluctuate overall in the later stage.
In the first three quarters of 2022, the price of construction steel showed a trend of rising first and then fluctuating and falling, and the overall price center of gravity moved down. According to Zhuochuang Information data monitoring, as of September 19, the average price of third-level rebar in the national market was 3981.74 yuan/ton, a cumulative price of 650.76 yuan/ton from the beginning of the year, a decrease of 14.06%. According to the analysis of
, the price trend in 2022 is mainly divided into two stages. The first stage is from the beginning of the year to the beginning of April. In this stage, the main behavior of price fluctuations is the policy-driven. In this stage, the main driving factor is policy-driven. Under the background of the "stable growth" policy, the positive expectations of demand drive price rise. The second stage is from early April to the present, with overall price fluctuating and falling. The main driving factors affecting prices in this stage have changed from previous policy-driven to fundamental-driven, and the contradiction between supply and demand has increased, especially the weak demand has restricted the continued decline of prices.
At present, the main driving factor of the entire steel price is still fundamentally driven. In the context of relatively stable supply, weak demand is the main driving factor affecting prices. Now we will analyze the changes in demand and trends in depth to grasp the future steel price trends.
Domestic demand: Under the background of slowdown in domestic economic growth, terminal demand is released slowly
According to the economic cycle, the entire economy is currently in a downward cycle. According to data from the National Bureau of Statistics, China's GDP in the second quarter of 2022 increased by 0.4% year-on-year, and the economic growth rate is estimated to be 4.5% in the third quarter. China's economy has gradually turned to low-speed growth in medium and high speed, and the economic growth rate has slowed down significantly. Against this background, terminal demand has been released slowly.
Real estate industry, according to data from the National Bureau of Statistics, from January to August, the national real estate development investment was 908.09 billion yuan, a year-on-year decrease of 7.4%, and the newly started housing area was 850.62 million square meters, a decrease of 37.2%. The real estate industry is still sluggish. According to Zhuochuang Information data model, from January to September, the demand for construction steel in real estate continued to decline, with a cumulative value of 182.15 million tons, a year-on-year decrease of 57.95 million tons, a decrease of 24.14%. The demand for real estate management also dropped by about 20% month-on-month. In the future, the "housing and delivery" policies in various parts of the country have been frequently introduced recently, which will make up for the demand gap brought about by real estate to a certain extent, and may be slightly better overall in the later period.
Infrastructure and management industry, according to data from the National Bureau of Statistics, the growth rate of infrastructure investment from January to August increased by 8.3% year-on-year. The overall investment in the infrastructure industry remained good, but due to the overall weak constraints of real estate, the progress of funds such as special bonds to physical projects is still relatively slow, and the overall start of infrastructure industry is still lower than the same period in previous years. In the later stage, under the policy background, infrastructure demand shows a stable and small growth trend.
External demand: capital liquidity tightens and exports show a decline
Entering 2022, US inflation has been rising all the way, with CPI as high as 9.1% in June. Although CPI fell back to 8.5% in July, it is still at a historical high in 40 years. Affected by the increasing inflation, the Federal Reserve has raised interest rates by 4 times so far, including 50 basis points in March and May, and 75 basis points in June and July respectively. Affected by the continuous interest rate hikes, foreign capital liquidity has tightened and demand has declined. According to data from the General Administration of Customs, the total export of steel from January to July was 40.07 million tons, a year-on-year decrease of 6.9%. For the later period, it is expected that the Federal Reserve will still have a 75 basis point interest rate hike at the end of September. Foreign demand will still be weak in the later period, and exports may show a stable and small and medium-sized downward trend.
Market mentality: Market mentality becomes cautious, and enthusiasm for goods has declined
This year, under the background of weak overall demand, traders' shipments and shipment speed have declined. It is understood that the shipments of most steel traders this year fell by 20%-30% compared with last year. Affected by this, the market is cautious and confidence has declined. According to Zhuochuang Information Research Data, the average confidence index of steel market participants this year was 42%, down 25 percentage points from the annual average. The decline in confidence has led to a decrease in enthusiasm for goods, which has led to weak demand.The confidence index of market participants in the current period was 52.5%, an increase of 20 percentage points from August, but is still 14.5 percentage points lower than the same period last year. Confidence has rebounded month-on-month, and the enthusiasm for buying goods in the later period may improve, but the overall purchase of goods may still be lower than the policy level.
Overall, the main driving factor affecting steel prices in the later stage is still the demand level. Based on the support of stable growth in infrastructure investment growth and improved market mentality, it is expected that demand may show a stable and small growth trend in the later stage. However, foreign demand still shows a steady decline under the constraints of tightening liquidity of capital. The overall estimated steel price may fluctuate.
This article is from Zhuochuang Information
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