Affected by the epidemic, after the Spring Festival, the spot prices of rebar and HRC have generally dropped by about 350-600 yuan/ton. Subsequently, the country introduced a series of monetary and fiscal policies, resulting in explosive growth in steel consumption, rapid inventory depletion, and rising steel prices. In September, due to factors such as real estate regulation, tight infrastructure funds, and the impact of imported resources, sales weakened and inventory accumulated slightly, and the market went through more than a month of adjustment. Entering October, affected by factors such as accelerated real estate turnover, strong recovery in manufacturing, and substantial export improvement, prices returned to the upward channel. Disk prices also broke through the previous highs and continued the rise in the second and third quarters after the epidemic. It showed a V-shaped reversal price trend.
Looking forward to 2021, the domestic economy is expected to continue to recover. 2021 is the first year of the "14th Five-Year Plan". It clearly requires economic development to achieve new results and basically achieve the long-term goal of socialist modernization by 2035. The GDP growth rate is expected to reach 8% in 2021, the macro environment will remain generally loose but the marginal tightening, the growth rate of M2 and social finance will slow down slightly, the fiscal deficit rate may drop from 8.5% to about 6.5%, and the scale of local special debt Or it will maintain a high of 3 trillion yuan. It is expected that in 2021 real estate steel demand will be stable, infrastructure steel will grow slightly, net exports will gradually recover, automobiles, home appliances, and manufacturing are expected to achieve high growth. The overall steel demand is expected to increase by 2% year-on-year, and inventory is expected to return to normal levels. At the same time, supply-side capacity replacement and new projects in 2021 are expected to increase pig iron production capacity by 21 million tons and crude steel production capacity by about 30 million tons. Production will continue to grow, but the growth rate will be lower than 2020; steel profits will further shrink .
We expect pig iron production to reach 913 million tons, a year-on-year increase of 2.2%, scrap consumption to 267 million tons, a year-on-year increase of 6.9%, and crude steel production to reach 1.112 billion tons, a year-on-year increase of 2.9%, equivalent to 26 million tons of crude steel net exports, a year-on-year increase of 74.7% , The cumulative demand is 1.087 billion tons, a year-on-year increase of 2.0%. On the whole, supply and demand will be relatively balanced in 2021, and the valuation center is expected to rise. It will be supported by the prices of raw materials such as iron ore and coke and short-process production costs, and the upward space will be limited by demand. Investment is looking for a mismatched rhythm of supply and demand.
