The Estimated Consumption Of Construction Steel Products In March Performed Better Than The Previous Month

According to research estimates, the actual consumption of construction steel increased by 20% year-on-year in March and 74% month-on-month; the actual consumption of rebar increased by 23% year-on-year in March and 83% month-on-month; the actual consumption of wire coils increased by 16% year-on-year in March, an increase of 59% month-on-month.

Since the Spring Festival at the end of January, construction steel consumption has gradually picked up in February, but the market was closed after the Spring Festival, and consumption did not recover significantly until the second half of the second week of February. After that, the market trading atmosphere and the pace of terminal start-up gradually returned to normal. In addition, the national PMI data and real estate transaction data in February have improved significantly month-on-month, making the domestic environment show signs of improvement. The superposition of the two sessions has boosted market expectations and trading mentality, thus promoting the consumption level in March to reach a higher level after the year, and it has improved significantly compared to last year.

From the perspective of supply, rebar increased by 13% year-on-year and 39% month-on-month; coils increased by 13% year-on-year and 31% month-on-month; construction steel increased by 13% year-on-year and 36% month-on-month. From the point of view of the overall and sub-category supply of building materials, there has been an increase year-on-year. The main reason is that policy-based production restrictions and proactive production reductions still affected the production status of the company during the same period last year. However, neither of the two types of factors have any significant impact this year, and the production motivation of the company is independent and positive.

From the perspective of net exports, rebar fell by 242% year-on-year and 11% month-on-month; coils increased by 264% year-on-year and 11% month-on-month; construction steel fell 311% year-on-year and 11% month-on-month. Since the general environment of tense international relations last year has continued, the superimposed foreign inflation environment and demand performance have not improved, so the current export situation and volume have not improved significantly.

From the perspective of inventory changes, the overall destocking of rebar and coils in March last year was only 580,000 tons and 720,000 tons. In March this year, the spiral destocking is expected to increase to 2.9 million tons and 1.17 million tons. The main reason is that the nationwide epidemic control during the same period last year and the passive suppression of demand made it difficult to go to the warehouse, and some areas accumulated inventory. At this stage of this year, the national production and living conditions are basically normal, and factors such as demand recovery, policy support, and improvement in the domestic environment promote the continuous destocking.

Looking at the fundamentals in March this year, the overall steel performance has increased both in supply and demand, and the demand has improved, so there is no logical contradiction for the time being. Superimposed on the strong raw materials at this stage, the production cost continues to be high, which has strong support for the bottom of steel prices. In addition, the current market seems to be too pessimistic about demand expectations, although the average daily transaction level is sluggish. However, according to the survey, the winter storage inventory at this stage has been gradually digested, and it is relatively close to the end, and the increase in the proportion of direct supply is superimposed, which makes the transaction performance not obviously hot. In addition, from a macro point of view, the blessing of favorable policies has accelerated the pace of starting new projects, and the sentiment of rigid demand procurement and the transfer of funds have also improved month-on-month. On the whole, with the improvement of the macro superimposed fundamentals, steel prices are expected to continue to fluctuate strongly, but we still need to be cautious. After all, the demand gap of housing construction and the situation of exporting to foreign countries still need to be paid attention to at all times.

Hebei Sinostar Trading Co., Ltd. One-stop building materials, hardware, and home furniture sourcing solutions provider. Our main products include Roofing Sheet, Metal Pipe, Wire and Mesh, Fence and Gate, Pipe Fittings and Valves, Fastener and Screw,  Iron  Art,  Scaffolding,  Iron nails, Folding  Chair, Living  Room  Furniture, Dining  Room  Furniture, Storage  Shelf, Outdoor  Furniture, Storage, Metal Tools, and other steel products.

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