Positive Factors Take Effect, Output Becomes The Key To The Steel Market

According to statistics, the steel market's related indicators accelerated in the third quarter of this year, and the year-on-year growth rate in September reached a new high, indicating that steel market demand is higher than in the same period last year. On the other hand, steel supply pressure remains relatively high, which has become the most significant impediment to current and future steel market conditions.

Steel exports maintained a year-on-year growth. 

According to statistics, the steel market's related indicators accelerated in the third quarter of this year, and the year-on-year growth rate in September reached a new high, indicating that steel market demand is higher than in the same period last year. On the other hand, steel supply pressure remains relatively high, which has become the most significant impediment to current and future steel market conditions.

According to the General Administration of Customs, my country exported 4.984 million tons of steel in September 2022, a 1.3% increase year on year. From January to September, steel product exports totaled 51.209 million tons, a 3.4% decrease year on year and a 0.5 percentage point decrease compared to the first eight months. Steel exports fell month on month in September. At the same time, the main export channel for steel, indirect export, is thriving. The export value of my country's mechanical and electrical products increased by 10% in the first three quarters of this year, accounting for 56.8% of the total export value. Among these, automobile exports increased by 73.9% year on year in September, loader exports increased by 42.3% year on year, and excavator exports increased by 73.3% year on year. Steel-consuming products such as construction machinery and automobiles have been exported at a rapid pace since the beginning of this year. In particular, the export growth rate of excavators exceeded 70% once again in September, reaching a historical monthly high and surpassing domestic sales for the first time.

Looking ahead to steel exports, particularly the trend of indirect steel exports, there are two major factors to support: First, the RMB's depreciation against the US dollar has increased China's steel export competitiveness. In September, the renminbi depreciated slightly against the US dollar. Second, the significant increase in energy prices in Europe and the United States has had a significant impact on steel production and steel-consuming products. ArcelorMittal, one of the world's largest steelmakers, was reportedly forced to cut production at its steel plant in Hamburg, Germany. Energy bills have increased sevenfold since the outbreak of the Russian-Ukrainian conflict, making it impossible for factories to operate as they used to; it will increase costs due to high energy prices and weaken market competitiveness, according to Uwe Braun, CEO of ArcelorMittal Hamburg. All of this will make room for China's steel and steel-consuming products to expand their exports.