The hottest steel industry is not prosperous in th

Iron and steel industry: not prosperous in peak season and not weak in off season

main events: the Bureau of statistics released the operation data of the iron and steel industry in September, combined with the customs import and export data as follows:

China's crude steel output in September 2014 was 67.54 million tons, unchanged year-on-year; In September, the average daily output of crude steel was 2251300 tons, an increase of 1.28% month on month. The output of crude steel such as aluminum magnesium alloy, plastic and composite materials in China was 618 million tons in June, with a year-on-year increase of 2.3%, 0.3 percentage points slower than that of the month

in September, China's steel output was 95.75 million tons, an increase of 1.7% year-on-year; China's steel output in June was 838.53 million tons, with the pendulum placed on the edge of the support with wood blocks, an increase of 5% and a decrease of 0.4 percentage points over the month

in September, China exported 8.52 million tons of steel, an increase of 760000 tons over the previous month, an increase of 73.2% year-on-year; In June, China exported 65.34 million tons of steel, an increase of 39.3% year-on-year

in September, China imported 1.36 million tons of steel, an increase of 190000 tons over the previous month, an increase of 9.7% year-on-year; In June, China imported 11.01 million tons of steel, an increase of 5% year-on-year

China imported 84.69 million tons of iron ore in September, the second highest level in history, only lower than 86.83 million tons in January this year, with a year-on-year increase of 10.11 million tons or 13.6%, and a month on month increase of 9.81 million tons or 13.1%. In June, China imported 699.07 million tons of iron ore and its concentrate, an increase of 16.47% year-on-year

the peak demand season is not prosperous: the downstream demand for steel in September is far lower than the market expectation. The rapid decline in real estate construction has hurt the steel consumption, while the market leading fee abroad has caused damage. At the same time, it has dragged down the machinery and other related steel consumption industries. Steel orders are depressed, the prices of rebar and hot coil fell sharply in that month, hitting a new low in recent years, and the profits of steel mills have shrunk. The month on month rise in steel output in September was not caused by the increase in domestic demand, but mainly from exports. If the export contribution is excluded, the domestic demand in September should show a negative growth state month on month and year-on-year

foreign demand is still strong: the factors driving the sharp increase in exports this year have not changed. With the continuous decline of domestic steel prices, the price gap between domestic and foreign countries has increased this year, and the high profits from export sales have led to the constant strength of steel mills' export momentum; In addition, the arrival of the peak construction season in the northern hemisphere is also an important factor in the increase of external demand

domestic steel prices rebounded in October, but under the constraints of the raw material side and the demand side, the rebound space is limited, and the internal and external price difference is difficult to converge quickly. It is expected that export orders will remain strong

the iron ore import data is on the high side: the imported ore data in September may not reflect the actual situation of foreign ore production and shipment. Although the overseas iron ore production capacity will still show an upward trend in the medium and long term, it is unrealistic to rise sharply within a month. The sharp increase in data may be related to the advance of the report before the National Day holiday. Of course, the fourth quarter is close to the end of the year, and foreign mines have a tradition of flushing sales, and ore imports may remain high

future judgment

short term supply and demand improvement and steel market recovery: Recently, steel prices have shown signs of rebound, which we believe are mainly driven by the following factors: 1) downstream PMI data and traders' shipment feedback, downstream demand shows signs of month on month improvement; 2) The sharp drop in steel prices in September was accompanied by the complete destocking of the industrial chain. At present, the inventory of the industrial chain has hit the bottom, and the inventory cycle is phased upward; 3) During the APEC meeting in November, the production of a considerable number of steel mills in Hebei will be affected, and short-term supply tension is expected. Although the steel peak season is about to pass, the above three factors are expected to hedge against the seasonal decline in demand, and it is expected that the short-term steel price and industry profit will rise periodically

central upward and fluctuating forward: in the medium and long term, the improvement trend of the steel supply environment is relatively certain, and the uncertainty mainly focuses on the short-term fluctuation of demand. However, as long as the demand can still maintain a low-speed positive growth state, the profit center of the steel industry will still show an upward trend. We believe that the probability of steel demand being in the negative growth range for a long time is small. From the situation in September, after the negative growth of domestic steel demand, the policy level stimulation to entities has increased significantly, and the downstream demand is expected to be corrected upward. This is expected to become the norm at the medium-term level, that is, the policy hand will maintain the steel demand in the state of positive increase in yield strength, and the steel profit will recover in a trend with the mid cycle improvement of capacity supply