In-Depth Analysis of The Steel Market in 2024

Supply and demand imbalance: In 2024, the country's cumulative crude steel production will be 1.005 billion tons, a year-on-year decrease of 1.7%; steel production will be 1.4 billion tons, a year-on-year increase of 1.1%. However, the apparent consumption of crude steel in China is about 892 million tons, a year-on-year decrease of 5.4%. The decline in demand has led to a prominent contradiction between supply and demand.

Price fluctuations: Steel prices generally show a fluctuating downward trend, fluctuating between downward fluctuations and periodic rebounds. The decline in steel prices exceeds the decline in raw materials, further compressing the profit margins of steel companies.

Differentiation of corporate performance: The revenue and net profit of some steel companies have declined significantly, such as Valin Steel's net profit fell by 59.99% year-on-year, and Fangda Special Steel's net profit fell by 64.02% year-on-year. However, there are also companies such as Nangang Co., Ltd. and Jiuli Special Materials that have achieved net profit growth, mainly due to the optimization of product structure and the increase in the production and sales proportion of high-end products.

Weak downstream demand: The proportion of steel demand on the real estate side continues to decline, and the newly started area, completed area and housing sales area of ​​real estate have continued to decline year-on-year. At the same time, the growth rate of the manufacturing industry has slowed down, and the role of the automobile, home appliance and other industries in driving steel demand is limited.

Cost pressure is relatively large: Although the price of iron ore has fluctuated, it is still at a high level overall. The prices of raw materials such as ore and coking coal remain at a high level, which increases the production cost of steel companies and compresses profit margins.

International trade environment: International trade protectionism is on the rise, and many countries have taken sanctions against China's steel pipe exports. Steel pipe exports face great uncertainty, which affects the export market of the steel industry.