Steel Prices in the Second Half of the Year Are Expected to Be Higher than the First Half
At the 20th Steel Industry Development Strategic Conference hosted by SteelHome, Wu Wenzhang made predictions about the economic situation in 2024, expecting China's economic growth to reach around 5%. He pointed out that China's real estate industry is currently undergoing a period of deep adjustment, while transportation infrastructure and urban municipal construction have entered a stage of development and improvement. Local governments are gradually withdrawing from land financing and debt-driven development models, and steel consumption in the construction industry continues to decline.
According to data, China's crude steel production increased by 1.6% year-on-year in the first two months of this year, while pig iron production decreased by 0.6% year-on-year, and steel production increased by 7.9% year-on-year. Nationwide apparent consumption of crude steel equivalent decreased by 1.3%. Additionally, data from the General Administration of Customs showed that China's steel exports increased by 32.6% in the first two months.
In response to the current market situation, the China Iron and Steel Association has issued an initiative calling for stable development of the steel industry. The National Development and Reform Commission has indicated that it will continue to regulate crude steel production nationwide this year.
Wu Wenzhang stated that the steel industry should primarily adopt legal and market-based measures, supplemented by necessary policy measures this year. He believes that if annual steel production decreases by 20 million to 30 million tons compared to the previous year, the domestic steel market is expected to achieve a balance between supply and demand.
It is expected that domestic steel market prices may rebound in the second quarter. In the second half of the year, influenced by macroeconomic policies, increased production restrictions on steel enterprises, recovery in infrastructure and real estate investment, and international market factors, steel prices are expected to be higher than in the first half of the year. It is predicted that the average price of ordinary hot-rolled steel in 2024 will range from 3700 yuan/ton to 3800 yuan/ton.
In terms of raw materials, it is expected that the supply and demand pattern of the domestic iron ore market will improve. As for coke, it is expected that domestic coking enterprises will continue to face difficulties in production and operation in 2024. It is predicted that the average import price of iron ore this year will be around 110 US dollars per ton, and the average coke price will decrease by approximately 200 yuan per ton.
Wu Wenzhang stated that the steel industry will continue to focus on structural adjustment, green and low-carbon development, intelligent manufacturing, and other themes, widely applying new technologies and cultivating new momentum for high-quality development.