Supply analysis of steel industry

Iron and steel production rebounded year-on-year
Since the beginning of 2023, driven by strong expectations of macroeconomic stabilization and recovery, as well as strong support from relatively high raw material costs, the Chinese steel market has shown a volatile and rising trend. The profit margin of steel mills has continued to improve, and the release of capacity has been correspondingly strengthened. The output of pig iron, crude steel, and steel products has shown a year-on-year growth trend.

Social inventory of steel continues to decline
In March 2023, the social inventory of steel continued to decline, with the inventory level significantly lower than the same period last month, and the slowdown accelerated compared to the same period last year. Since March, the social inventory of steel in China has shown a significant acceleration feature. It is expected that the social inventory of steel will further decline in April, but the speed of the decline will depend on the release of demand and capacity.