Today, the curtain of the two sessions of our country officially kicks off. looking at the government work report, it is clearly pointed out that the investment in the railway plan for 2020 is 900 billion yuan, an increase of 97.1 billion yuan over the actual investment of 802.9 billion yuan in 2019. In addition, the Ministry of Transport said at a press conference of the State Information Office a few days ago that the highway and waterway investment is expected to be about 1.8 trillion yuan in 2020. According to SMM's preliminary calculation, if the planned investment is strictly implemented in 2020, the steel consumption of infrastructure projects will be 407000 tons less than in 2019-according to the data, transportation infrastructure investment does not seem to be as strong as the market expected.
However, SMM still believes that the steel consumption of China's transportation infrastructure industry will continue to grow in 2020, during which urban rail transit and railway projects will become the main force to increase. And on the whole, in terms of transportation infrastructure, the growth rate is expected to be about 4% and 6% in 2020.
Table 1: comparison of steel consumption of transportation infrastructure projects such as "Tiegong Airport" from 2019 to 2020 (adjustment value)
Source: SMM
The main reasons are as follows:
First, the actual steel consumption cycle of the project is not exactly matched with the investment year.
Taking rail transit as an example, there is a 2-year time difference between the early decision-making and the start of construction.
Figure 1: urban rail transit project has gone through stages
Figure 2: the scale and annual construction investment of urban rail transit lines under construction in China from 2016 to 2019
Source: China Urban Rail Transit Association
It is observed that the amount of rail transit investment from 2016 to 2019 is in a state of continuous growth, of which the construction investment in 2018 and 2019 increased by 15.98% and 8.93% respectively over the previous year. Based on its 20% share in steel consumption of transportation infrastructure, urban rail transit construction will contribute more than 2% to the steel consumption of transportation infrastructure industry in 2020.
Second, the amount of capital injected into railway projects has increased significantly. On the morning of May 19, the Minister of Transport revealed at the news conference of the National New Office on "speeding up the Construction of a Traffic Power to promote the High-quality Development of the Transportation Industry" that in order to hedge the impact of the epidemic, the Ministry of Transport, on the basis of the existing project library, has stored a number of new projects into the warehouse, and it is expected to invest more than 800 billion yuan, and construction can be started in a timely manner if necessary. Calculated on the basis of a steel consumption of 3330 tons per 100 million yuan, the "spare tire" project starts by about 10%, which can pull an additional steel demand of about 2.664 million tons.
Third, the new infrastructure project will boost steel consumption by 200-2.3 million tons. In addition to traditional infrastructure, this year's "new infrastructure projects occupy the public's view." Among them, the UHV-2020 UHV construction project has a clear investment scale of 112.8 billion yuan, which can drive social investment of 223.5 billion yuan, with an overall scale of nearly 500 billion yuan, and is expected to drive steel consumption of about 2 million tons.
The charging pile-charging Alliance predicts that 373000 new private AC charging piles will be added in 2020, the number of private AC charging piles will reach 1.076 million, the number of public charging stations will reach 12000, and the number of public charging stations will reach 48000. Based on the calculation that the steel consumption of a column is generally about 15 kg, it is estimated that the steel consumption of charging piles of new energy vehicles will be about 200000 ~ 300000 tons in 2020.
From 5G base stations to 2020, it is estimated that 125 billion yuan will be invested in new 5G base stations. According to the calculation that 3% of 5G base stations need to build new towers, the amount involved is about 4 billion yuan to 6 billion yuan, and the demand for steel is relatively limited.
Finally, there is a certain difference between the planned investment and the actual investment. According to the situation in 2019, the planned investment in civil aviation projects in 2019 is 85 billion yuan, the actual completed investment exceeds the plan by 14%, and the completed investment in highway and waterway projects is even 30.29% higher than last year.
[spot arbitrage training] Black experts teach practical experience and scientific transactions achieve profit growth https://news.smm.cn/news/101063159
For more information, please contact SMM Iron and Steel Division: Lu Qingping Tel: 021 Murray 51595781
