Domestic steel market in July

In July, steel production enterprises still faced strong structural contradictions between supply and demand. Due to factors such as the improvement of macroeconomic policy expectations, the deepening of the off-season effect, the insufficient release of terminal demand and the support of cost resilience, the domestic steel market showed a trend of falling first and then rising. Due to the impact of the compression of variety profits again, the capacity release of large and medium-sized steel production enterprises began to be under pressure. According to statistics from the China Iron and Steel Association, in the first and middle ten days of July 2024, the average daily output of pig iron of key steel enterprises was 1.926 million tons, a decrease of 2.5% month-on-month and 4.4% year-on-year; the average daily output of crude steel of key steel enterprises was 2.150 million tons, a decrease of 3.0% month-on-month and 4.2% year-on-year; the average daily output of steel of key steel enterprises was 2.008 million tons, a decrease of 4.8% month-on-month and 5.9% year-on-year.
At present, the domestic steel market is still in the off-season stage of demand, and the market building materials transactions have declined across the board, but the plate transactions have maintained a certain resilience. As the northern region has entered the "seven ups and eight downs" thunderstorm season, the southern region has also been frequently affected by the "typhoon season", which has significantly restricted the release of terminal demand. The structural adjustment of the domestic steel market is still ongoing. Due to the overall decline in demand for construction steel and the conversion from old to new national standards, the construction steel market has once again seen a "dumping of goods at a loss", and steel mills have also significantly increased their shutdowns and maintenance of building materials production lines. Structural production restrictions will be beneficial to the supply and demand balance of the construction steel market in the later period, and domestic plate manufacturers will continue to enjoy the "policy dividends" of large-scale equipment renewal and old-for-new consumer goods, which will also help the structural transformation and upgrading and high-quality development of the domestic steel industry.