In April 2023, the PMI of the national steel industry was 39.2%, down 14.1 percentage points from the previous month, and the index fell below the line of growth and contraction, indicating that the situation of the domestic steel industry turned to a downturn in April, with contraction at both ends of supply and demand. From the point of view of sub-indexes, all sub-indexes of PMI this month generally showed a downward trend, among which the ex-factory prices, raw material purchase prices, new orders, new export orders and output indexes all fell sharply, while the finished materials inventory and backlogged orders index only picked up slightly. Specifically, the domestic steel market in April showed a downward trend of shock, on the one hand, the macroeconomic data released earlier than expected, causing the market to worry about the sustainability of future demand, and the follow-up market transaction is difficult to have significant volume, which increases the market wait-and-see atmosphere; On the other hand, this month, iron ore, dual coke and other raw materials prices continue to fall, the market negative feedback trading logic, resulting in lower resonance of materials and raw materials, in the second half of the month, some regional steel mills began to reduce production.
Looking ahead to May, the author thinks that the current domestic steel market presents a phase of strong demand for weak situation, especially by the raw material end of the weak drag, material prices or continued weak operation. On the one hand, although many steel mills began to issue production cut notice recently, the overall output has also fallen from a high level, but in absolute terms, the current output is still at a high level, and the price of raw materials fell simultaneously, slowing down the pace of output decline; On the other hand, although the demand side has a certain resilience, but for the current "peak season" period, the overall performance is less than market expectations. Current focus on the market. Changes in the general market supply and demand structure, especially whether steel production can be steadily promoted, comprehensive forecast, May domestic steel prices or continued weak operation, if the output appears more obvious contraction, the price may usher in a rebound.
