Consumption in 2023 has been relatively obvious repair; This year, high-end consumption and cross-border consumption are expected to further enhance the level of consumption. At that time, under the trend of residents' income and consumption willingness to gradually improve, the superimposed consumption policy will continue to exert its power, and the foundation for consumption recovery will continue to be consolidated, which will help consumption stabilize. The spot market was stable during the holiday period. During the holiday, the market wait-and-see mood is strong, and traders' inventory willingness is weak. Steel inventories continued to accumulate, and apparent consumption of the five major varieties continued to decline. Today, the pan opened, the black department quickly pulled up, the market was instantly ignited, the spot market began to become active, the shipping price is relatively strong, the trend between varieties is differentiated, the demand for plates is slightly better than building materials.
On December 29, the National Development and Reform Commission revised and issued the "Industrial Structure Adjustment Guidance Catalogue (2024)", involving 7 steel encouraged categories; 21 steel restrictions; Steel elimination category 28. As an important tool for macro-control, the proactive fiscal policy has intensified its effectiveness and hit a "combination of policies" to effectively promote economic recovery. We will improve policies to support taxes and fees and reduce the tax burden on business entities. We will appropriately increase the amount of special bonds issued by local governments to boost effective investment. Consumption is a lasting driver of domestic demand and economic development, and local governments have taken multiple fiscal measures to boost consumption. The Caixin China Manufacturing purchasing Managers' Index (PMI) recorded 50.8 in December, up 0.1 percentage points from the previous month and in expansion territory for two consecutive months. The expansion rate of manufacturing production and demand slightly accelerated, respectively, the highest since June and March 2023. However, the current domestic and external demand is still insufficient, and the foundation for economic recovery needs to be consolidated. The recovery of the manufacturing industry has continued to improve, the demand for steel has been released, and the demand for rolled sheets has steadily increased, which is good for the price trend of rolled sheets.
From the point of view of the cost end coal coke, coke supply recovery, higher than the historical level of the same period, but the steel mill losses are serious, the purchase intention is weak, coke prices gradually pressure, there is a certain expectation of an increase in January coke or will oscillate weak operation; On January 2, some steel mills in Tangshan area lowered the price of wet quenching coke by 100 yuan/ton, and the price of dry quenching coke by 110 yuan/ton, and it was implemented at zero on January 3, 2024. In January, the security situation may be eased, domestic coal production will gradually recover, while coking coal imports are still optimistic, coking coal supply will recover, coking coal prices have a pressure trend, the need to continue to pay attention to the security situation changes, it is expected that the coking coal pan will oscillate weak operation. However, because the disk has reflected the expected increase and decrease, the impact on steel prices is little.
Iron ore arrivals in January may increase, and internal mine production is expected to remain stable. On the demand side, molten iron production is expected to maintain a downward trend, and some steel mills have maintenance plans at the end of the year. Approaching the Spring Festival, it is necessary to pay attention to the replenishment of steel mills at the end of the year, and the stock needs to be replenished before the festival or the spot price is supported. The loose supply and demand pattern in January may continue, port inventory continues to accumulate, and it is currently in the off-season, weak reality and strong expectations continue to game, and the current macro factors have a greater impact on market sentiment. Overall, January mine prices are expected to maintain a high consolidation trend. At present, the spot market price is basically stable, a small number of price increases, the New Year steel traders on the follow-up steel trend is still full of expectations; At present, the cost of steel mills is at a high level, the production enthusiasm has weakened, the order pressure of steel mills is not large, the amount of north materials to the south is also reduced relative to previous years, and the overall confidence of steel mills is strong, which will boost the market trend. According to the comprehensive analysis of China Steel Network Information Research Institute, it is expected that in a short period of time, the market as a whole will be in a situation of weak real supply and demand, enhanced macro expectations, and strong cost support, and steel prices will gradually rise at the bottom of the oscillation.
