According to the index report issued by the China Iron and Steel Association’s Steel Logistics Professional Committee on April 30, the PMI of the domestic steel industry purchasing managers index was 51.7% in April, a year-on-year increase of 1.1 percentage points.
In the main sub-indices, the production index rose slightly, the new orders index and the new export orders index increased significantly, the purchase of raw materials index rose slightly, and the raw materials inventory index remained within the contraction range.
Steel production is expanding slightly. In April, the steel industry production index was 51.3%, a slight increase of 0.7% from the previous quarter. Production-related procurement activities are also clearly active. According to the data, after the end of the northern heating season, the start-up rate of blast furnaces in steel plants has gradually increased, and the demand for raw materials has increased. However, in some areas, environmental protection measures have been strengthened, and related steel mills have stopped production and overhauled, which has inhibited the overall supply, and production recovery has not been obvious.
The price of steel raw materials remained low. In April, the purchase price index for raw materials was 45.3%, which was a 4.5% point-on-quarter increase and remained in the contraction range. The price of raw materials varied, among which the price of coke and domestic ore decreased, and the prices of billet, scrap and imported ore increased. According to the monitoring data, as of April 28, the ex-factory price of plain billet in Tangshan was 3,590 yuan per ton, up by 140 yuan from the end of last month; the price of secondary coke in Shanxi was 1,550 yuan per ton, down by 100 yuan from the end of last month. In April, the price of steel products rose sharply, but the trend of raw material prices was different. The increase in the cost of steel enterprises was not obvious, and profits are expected to continue to rise.
The analysis of the relevant index report believes that the domestic steel market has obviously recovered in April, and a series of favorable news from macro policies and industries has boosted the market's optimism. At the same time, the environmental protection production restriction policies implemented in various localities and special inspections to remove production capacity and suppress “Grid Steel” have formed a certain degree of restraint on market supply, further improved the domestic supply and demand relationship, and the steel market will continue to show a tendency of rising shocks.