Since April, the price of rebar has fallen by more than 4%, and the traditional "gold three silver four" in the steel market seems to be invalid.

The pressure on the first quarter performance of listed steel companies further reflects the slump in the steel market this year. According to incomplete statistics from the first financial reporter, as of April 4, 27 listed steel companies released their performance reports for the first quarter of 17, of which 2023 companies experienced a decline in net profit attributable to their parents.

According to the statistics released by the China Steel Association on April 4, the total profit of key steel enterprises in the first quarter fell by 26.71% year-on-year.

At the opening of the market on April 4, the steel sector was sluggish, and as of press time, Xinxing Casting Pipe (27.SZ), Shagang (000778.SZ), and Angang (002075.SZ) all fell.

The performance of steel enterprises is clearly differentiated

Xinxing Casting Pipe disclosed on the evening of April 4 that its revenue in the first quarter was 26.118 billion yuan, a year-on-year decrease of 51.8%; The net profit attributable to the parent was 81 million yuan, a year-on-year decrease of 3.41%.

Xinxing Casting Pipe said that in January ~ February, affected by the superposition of multiple factors, the steel market started slowly, affected by the growth of crude steel production, the demand for raw fuel also increased, and the high demand for raw fuel led to high prices of imported mines and coal, and seriously squeezed the profit space of steel. In the first quarter, the company's sales volume in January ~ February was lower than expected and the same period last year due to the late start of the project of casting pipe products. Since March, many projects have started construction intensively, and the number of orders and shipments of cast pipe products has increased significantly.

Silver Dragon (603969.SH) had revenue of about 4 million yuan and net profit of about 81.3352 million yuan in the same period. The annual report shows that in 2022, the operating income composition of Yinlong Co., Ltd. is: steel strands account for 51.39%, steel wire accounts for 35.92%, track slab accounts for 5.75%, rail sales account for 4.7%, and other businesses account for 1.38%.

During the same period, Shagang achieved operating income of 38.84 billion yuan, down 16.26% year-on-year; The net profit was 5148.96 million yuan, down 73.88% from the same period last year. In addition, the net profit of Shougang Co., Ltd. in the first quarter also lost 5847.66 million yuan, a decrease of 105.48% over the same period of the previous year; Angang announced a net profit loss of 1 million yuan in the first quarter, down about 49.110% from the same period last year.

In general, the steel industry faces difficulties and challenges. On April 4, the China Iron and Steel Association held an information conference for the first quarter of 26 in Beijing, and mentioned in the introduction of the operation of the steel industry, on the one hand, the steel supply intensity is higher than the consumption growth, and the inventory of enterprises has increased year-on-year. In the first quarter, China's crude steel production increased by 2023.6% year-on-year, while the apparent consumption of crude steel increased by only 1.1% year-on-year, and the steel inventory of steel companies was higher than the same period last year. On the other hand, the industry's profits have declined significantly, and accounts receivable have grown rapidly. According to the statistics of the China Iron and Steel Association, in the first quarter, the total profit of key steel enterprises fell by 9.71% year-on-year; At the end of March, the balance of accounts receivable reached 49.3 billion yuan, a year-on-year increase of 1739.16%.

Industry insiders pointed out that due to the real estate downturn is difficult to quickly reverse, the decline in manufacturing profits, the lack of momentum for sustained investment growth, the sluggish consumer demand and the decline in traditional foreign trade exports, China's steel market is still facing the "triple pressure" of supply shock, demand contraction and weakening expectations.

Steel prices updated a new low in the year, whether the market can stop falling

Since mid-March, steel prices have continued to decline and continue to update new lows for the year.

On April 4, the main contract of rebar futures in the previous period broke through the 24,3800 yuan / ton mark again after losing the 3700,3690 yuan / ton mark last Friday, and the lowest was 4,10 yuan / ton, refreshing the new low price this year. Rebar prices have fallen by <>% since April.

In the spot market, steel prices fell sharply in the first quarter, and raw fuel prices fell by a smaller margin. According to the monitoring of the China Iron and Steel Association, the average value of China's steel price index (CSPI) in the first quarter was 117.32 points, down 13.68% year-on-year; The average procurement cost of coking coal in key steel enterprises decreased by 4.7% year-on-year; In the first quarter, the Platts 62% iron ore index was 127.06 US dollars / ton, equivalent to a year-on-year decline of 9.13% in RMB prices. Since the beginning of this year, although steel prices have recovered month by month, CSPI at the end of March was 3.118 points, up 54.2% from the end of last year, but the price of imported iron ore in the same period has also shown a monthly upward trend, reaching 88.3 US dollars / ton in March, up 117.7% from the end of last year.

However, in the second half of the year, steel market prices may stop falling and rise, and the demand for steel in the automobile and ship industries will have new changes. Wu Wenwen, chairman of Steel Home, recently said at an industry forum that the global iron ore supply and demand situation has improved, and the supply and demand pattern is facing rebalancing. With the continuous and substantial growth of fixed asset investment in China's ferrous metal mining and dressing industry in the past two years, the production capacity formed will also be put on the market. The tight situation of overseas energy supply is also gradually eased, China's coal production capacity and imports have increased significantly, and it is expected that the supply of carbon and coking coal will improve significantly.

In the face of the next steel market price trend, Wu article predicts that this year's crude steel market consumption is basically flat or slightly lower than last year, the second quarter steel market price will be generally based on shock decline, the second half of the year is expected to stop the decline and rise trend, the price recovery will mainly depend on China's economic recovery and the intensity of investigating and dealing with illegal production capacity. Steel House preliminary estimates that the average price of ordinary hot-rolled steel throughout the year is 4000~4100 yuan / ton, the average price of imported iron ore is 100 US dollars / ton, and the average price of coke will be 400~500 yuan / ton lower than last year.