From December 14 to 17, 2023, "2024 Great Change · New Momentum China Steel Market Outlook and 'My Steel' Annual Meeting" was held in Shanghai. On the 16th, Ren Zhuqian, vice president and senior researcher of Shanghai Steel Alliance E-commerce Co., LTD., delivered a keynote speech entitled "Mysteel2024 Steel Annual Report Release and Interpretation". Looking back at the steel market in 2023, Ren Zhuqian said that steel prices continued to decline throughout the year, raw materials were stronger than steel, and industry benefits hit a new low. In terms of supply, it is estimated that the cumulative output of the five major varieties of steel (thread, hot coil, wire, cold rolled, medium plate) in 2023 will be 884 million tons, an increase of 2.3%. Among them, rebar decreased by 3.5% year-on-year, and hot coil increased by 7%. In addition, in 2023, the production of other primary materials outside the five major varieties increased by nearly 25 million tons. In the past three years, the structural changes of steel varieties in China are very obvious.
In terms of inventory, the steel industry has continued to maintain a proactive destocking state since 2022. As of December 8, the total inventory of five major materials in 2023 was 12.9785 million tons, which was 2.1052 million tons lower than the inventory in the same period in 2021. At present, there is not much space for steel to go to the warehouse, and at the same time, looking at the changes in raw material inventory, the overall inventory has continued to maintain the status of warehousing in the past three years, resulting in the price elasticity of raw materials is greater than the price elasticity of steel. In terms of demand, it is expected that the apparent consumption of crude steel in China will increase slightly in 2023 compared with the same period last year, among which the consumption of sheet metal will increase and the consumption of long materials will decline. Subdivision of the downstream steel industry, in 2023, the amount of steel used in domestic real estate declined, the amount of steel used in infrastructure construction rose, the growth of steel used in automobiles was actually indirect exports, the increase of steel used in home appliances was the internal and external demand resonance, and the growth of steel used in ships was also dependent on external demand. In addition, from the perspective of demand contribution, the main force supporting crude steel consumption is direct and indirect exports, of which automobiles, home appliances, containers, shipbuilding and other industries support the significant growth of indirect steel exports in 2023. From January to October 2023, China's steel plate exports increased by 13.14 million tons year-on-year, accounting for nearly 70% of the total increase.
Looking forward to 2024, in terms of overseas consumption, it is estimated that the incremental growth of overseas steel consumption in 2024 will slow down, leaving limited export space for China, and the national steel exports will decline year-on-year. In terms of domestic environment, it is estimated that China's GDP will grow by 5.0% in 2024. Investment in fixed assets increased by 4.5%, investment in real estate development decreased by 6%, investment in manufacturing increased by 6.8%, and investment in infrastructure increased by 7.0%. Imports and exports increased by more than 1%; CPI grew by 0.5% year on year, a moderate and moderate recovery.
In terms of domestic consumption, China's steel consumption is expected to be basically flat in 2024, and the variety structure will continue to upgrade and adjust. The largest variable in the industry is still in the supply, the supply determines the profit, but also determines the overall price level of steel in 2024, with no incremental support for domestic and foreign demand, moderate supply reduction can gradually improve the industry efficiency. In terms of raw materials, it is expected that in 2024, global iron ore production will increase by 62 million tons year-on-year, consumption will increase by 26 million tons, and iron ore supply will be slightly relaxed. The growth rate of coking coal production slowed down and the supply continued to remain loose; Coke production capacity continues to be high, the price is weak operation; Scrap supply increased moderately and prices ran smoothly. Finally, Ren Zhuqian put forward suggestions around the high-quality development of the steel industry: The biggest problem of the industry now is the low concentration and the external dependence of iron elements is very high, so only by reducing the amount can the industry develop in high quality.
