Steel Demand Shows Signs of a Steady Recovery

Benefited by the rebound in the operating rates of real estate, steel demand has picked up. According to institutional data, deliveries of medium-thickness plate and extrusion from steel mills’ warehouses posted a hefty increase in some areas. The thriving demand thus boosted steel production.

According to the latest data from the China Iron and Steel Association, the output and inventory of key steel enterprises in early February both climbed on the month.

Huatai Securities pointed out that the steel industry was expected to be loss-making still in last December, and the profits may hit a new low since 2000. The main cause is attributed to supply-demand imbalance and firm prices of raw materials for iron ore such as coking coal.   Basically speaking, steel industry is subject to the development of real estate industry.

Since November 2022, the plenty of new policies have been issued to fuel the recovery of the real estate market. Therefore, when the favourable policies provide stronger support for the supply and sales in the real estate market, the expectations for steel demand recovery have also enhanced.