Third quarter data released

I. Slight rebound in average daily output of crude steel

In September, the daily output of domestic crude steel rebounded slightly. According to the latest statistics of the National Bureau of Statistics, the national crude steel output in September 2014 was 67.54 million tons, which was a year-on-year increase of 3.2%. From January to September, China's crude steel output was 618 million tons, an increase of 2.3% year-on-year. In September, the average daily output of crude steel in the country was 2,251,300 tons, a slight increase of 1.3% from the previous month and a year-on-year increase of 3.2%.

In September 2014, China's steel output was 95.75 million tons, a year-on-year increase of 1.7%; from January to September, China's steel output was 8,853,300 tons, an increase of 5% year-on-year. In September, the average daily steel production in the country was 3.1917 million tons, which was a 4.2% increase from the previous period, setting a record high.

Second, steel exports maintained a good momentum

In September, domestic steel exports hit another record high. In September 2014, China exported 8.52 million tons of steel, an increase of 760,000 tons from the previous month, an increase of 73.2% year-on-year, and a record high. In the first nine months of this year, China's steel exports totaled 65.44 million tons, an increase of 39.3% year-on-year.

In September, China imported 1.36 million tons of steel, an increase of 190,000 tons from the previous month and an increase of 9.7% year-on-year. In the first nine months of this year, China’s steel imports totaled 11.01 million tons, an increase of 5% year-on-year.

Domestic steel exports maintained a good momentum in September, but the trend of increasing prices and decreasing prices continued. The difference between import and export prices is relatively high. Upstream ore prices have continued to fall, and domestic finished product prices have been consolidating at a low level. It is expected that steel exports will still maintain good expectations in October.

Third, social stocks remain low

Social inventory has remained low this year. According to monitoring, as of mid-October, the national steel inventory was 10.267 million tons, which was 25% less than the same period of last year. Among them, 5.229 million tons of construction steel stocks, a year-on-year decrease of 22.6%; plate inventory 5.038 million tons, a year-on-year drop of 27.5%.

In 2014, the social inventory remained low, which was in stark contrast to the continuous creation of steel companies. The strengthening of risk awareness in the circulation market has pushed the pressure on stocks from bottom to top, and the size of social stocks has been out of step with the large expansion of steel production and steel stocks. This change is more derived from the active control of steel traders. Non-passive. The "reservoir" role in the circulation market has weakened significantly.

Fourth, steel companies profitability improved

In August, the profit of domestic key steel companies improved. According to data from the China Steel Association, among the 88 key steel mills of the Iron and Steel Association, the profit for the month of August was 4.604 billion yuan, the profit rate was 1.52%, and the loss was reduced to 15.91%. Only 14 steel mills suffered a loss, which was a recovery of 854 million yuan. The steel industry showed a slight warming signal. From the August data, short-term banks, asset-liability ratios and other indicators are all falling, and inventory levels have declined from the beginning of the year.

In August, steel companies saw a significant recovery in profits. Part of the reason was that the price declines of iron ore and other raw materials began to be reflected in the cost of steel production. As of the end of September, the average market price of 66% grade dry iron concentrate in China was 778 yuan, a decrease of 29 yuan from the end of last month and a decrease of 3.6% from the previous month. In respect of imported iron ore, the market price of 61.5% of fine ore mine in Australia was 560 yuan, which was a decrease of 35 yuan from the end of last month and a decrease of 5.9% from the previous month. The cost monitoring data shows that the average cost of carbon billets produced using the original fuel purchased in September fell by 101 yuan compared with August. Although the finished product is also falling, the decline is smaller than the decline in raw materials. On the other hand, a good export momentum can guarantee the continuation of orders, the consumption of steel quantity and a better payment rate. However, in September, the domestic market for finished products fell, and the profits that rely solely on cost support will be compressed. In September, the average export price fell for five consecutive months. It is expected that the domestic steel company's profits will fall again in September.

V. Economic environment slows down slowly and steadily

GDP in the third quarter increased by 7.3% year-on-year, hitting a 22-month low. In the first three quarters of the year, the gross domestic product was 4,199.8 billion yuan, which was calculated at a comparable price and grew by 7.4% year-on-year. From a quarterly perspective, the first quarter increased by 7.4% year-on-year, the second quarter by 7.5%, and the third quarter by 7.3%.

Industrial production is basically stable. In the first three quarters, the added value of industrial enterprises above designated size increased by 8.5% year-on-year at comparable prices, and the growth rate was 0.3 percentage points lower than that in the first half of the year. From January to August, the industrial enterprises above designated size achieved a profit of 38,330 billion yuan, a year-on-year increase of 10.0%, of which, the main activity profit was 3587.0 billion yuan, an increase of 9.6%. The cost of the main business income per 100 yuan of industrial enterprises above designated size was 86.06 yuan, and the main business income profit margin was 5.52%.

The growth rate of investment in fixed assets slowed down. In the first three quarters, investment in fixed assets was 3577.8 billion yuan, a nominal increase of 16.1% year-on-year, and the growth rate was down 1.2 percentage points from the first half of the year. In the first three quarters of the year, the national investment in real estate development was 6875.1 billion yuan, a year-on-year growth of 12.5%, and the growth rate was down 1.6 percentage points from the first half of the year. The newly-started housing area was 13,114.1 million square meters, a year-on-year decrease of 9.3%.

The growth of money and credit is stable. At the end of September, the balance of broad money (M2) was 120.21 trillion yuan, an increase of 12.9% year-on-year, the narrow money (M1) balance was 32.72 trillion yuan, an increase of 4.8%, and the circulation currency (M0) was 5.88 trillion yuan, an increase of 4.2%. At the end of September, the balance of ***** was 79.58 trillion yuan, and the balance of *** deposits was 112.66 trillion yuan.

In the first three quarters, an increase of 7.68 trillion yuan was registered in the country, an increase of 404.5 billion yuan year-on-year, and new deposits of 8.27 trillion yuan, a decrease of 2.99 trillion yuan year-on-year. In the first three quarters, the size of the social ** was 12.84 trillion yuan, a decrease of 1.12 trillion yuan over the same period of the previous year.

Overall, the current slowdown in domestic economic growth is a foregone conclusion, and the overall economic environment is stable at a low level. The growth rate of investment in fixed assets continued to soar. The growth rate of real estate, infrastructure, and manufacturing investment went down. Although the real estate policy is fully relaxed, it can only solve the inventory problem and cannot solve the incremental problem. The decline in real estate is due to the reversal of its industry trend, not the result of policy pressure. Therefore, we believe that the downward trend of real estate growth will not be reversed, but there will be a phased rebound. The current manufacturing industry is in the process of long-term structural adjustment. There is a problem of overcapacity in traditional industries, and the scale of emerging industries is limited. The investment demand is generally declining. There is limited room for growth in downstream industries such as home appliances, ships, and automobiles in the fourth quarter.

The macroeconomic environment in the fourth quarter will not significantly change, the liquidity-oriented easing policy will remain unchanged, and the real economy will continue the process of de-capacity. It is expected that the US dollar will continue to appreciate and the commodity market will be under pressure. Downstream industries such as infrastructure, real estate, and manufacturing industries have all gone down. In the fourth quarter, they are in the off-season of the steel market, and the downward trend of the steel market cannot be changed.