On September 24, A shares closed up across the board at the same time, the steel sector also ushered in a surge. Wind plate tracking shows that the Angang steel plate rose 7.25%, the central enterprises steel plate rose 6.99%, the steel stocks rose 6.95%, and the Baowu plate rose 6.22%, all of which are in the forefront. A number of stocks, including Zhongnan (000717.SZ), Ling Steel (600231.SH) and Anyang Iron and Steel (600569.SH), rose by the daily limit.
"These two days steel stocks have performed strongly, rising continuously. It mainly benefited from the favorable promotion of the policy package, and the fundamentals have little to do with it." Wang Yingguang, senior analyst of Lange Steel network, told shell finance reporter that short-term steel enterprise profits have recovered in the mismatch of raw materials and finished materials prices, and the profits of billets and building materials have turned positive and further improved, so that steel production has picked up slightly since entering September, but it is still a state of low growth, and it is difficult to continue to significantly increase production in the current situation of slow demand recovery.
Wang Yingguang expects that the daily output of crude steel in September will remain low at about 2.6 million tons. Therefore, the supply in September will not continue to release too much pressure, and the inventory of thread is lower than the level of about 30% last year, which also has a certain support effect on the price, and the market needs to pay attention to the consumption of sheet metal.
Not long ago, the steel industry ushered in a signal of further deepening of supply-side structural reform. The Ministry of Industry and Information Technology issued a notice on the suspension of steel capacity replacement work shows that all regions are required to suspend the publicity and announcement of the new steel capacity replacement plan from August 23, 2024, and those who do not continue to publicize according to the requirements will be regarded as illegal new steel capacity, and will be notified as a negative model.
"The announcement by the Ministry of Industry and Information Technology is a move to take advantage of the situation in which the losses of the industry have widened and the management has been difficult." Wang Yingguang told shell finance reporter that since the implementation of the "Measures for the implementation of capacity replacement in the Steel Industry" (Ministry of Industry and Information Technology original (2021) No. 46), although the steel industry has effectively promoted the transformation and upgrading, structural adjustment, layout optimization and merger and reorganization through capacity replacement, there are still problems such as inadequate policy implementation and imperfect supervision and implementation mechanism. These problems have led to the failure of some capacity replacement projects to effectively achieve the expected goals, and even the phenomenon of taking the opportunity to expand capacity. At present, the supply and demand relationship in the steel industry is facing new challenges, and green and low-carbon, structural adjustment, layout optimization, mergers and acquisitions have put forward new requirements for capacity replacement policies.
Wang Yingguang said that as the world's largest steel producer, China's steel production capacity layout throughout the country, the overall production capacity has reached a high level. However, in some areas, there is disorderly expansion of production capacity and repeated construction, and the steel production capacity structure is not reasonable, some old production capacity has not been effectively eliminated, and new production capacity is often concentrated in efficient and low-consumption areas. This structural contradiction restricts the overall development level and competitiveness of the industry. Therefore, the suspension of capacity replacement will prompt enterprises to turn more energy to technological innovation, green low-carbon, intelligent manufacturing and other high-quality development paths. This will help improve the overall technical level of the industry, reduce energy consumption and emissions levels, and enhance market competitiveness.
In addition, Wang Yingguang stressed that the suspension of steel capacity replacement work is not equal to termination, and will not have much impact on the current steel market. In the long run, it is of great significance to maintain the balance of market supply and demand, stabilize market prices, and protect the healthy development of the industry. In the short term, the most important thing for the market is not production capacity, but to control output, and not to control the output of crude steel, but to control the output of steel.
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