In 2014, the domestic manufacture market fall finale basic is a foregone conclusion, December is expected to market volatility before and after the Spring Festival. As of the end of November manufacture volume has dropped below the price of low in nearly 10 years, from 2013, contradiction between supply and demand more highlights. In the macro policy level support efforts to reduce gradually, cold-rolled new line is put into production, the downstream demand growth is slowing under the condition of substitutes increase, this volume manufacture market fundamentals have gone from bad to worse.
The personage inside course of study is expected to manufacture volume market in 2014 after a difficult, even the 2016 expected in 2015 will not stronger. However, the current steel mills, markets and terminal are aware of the current volume manufacture market trouble, so in 2015 the market situation is not optimistic, but will tend to be more rational.
Volume manufacture market fundamentals worse than usual this year
Average monthly volume manufacture market price break 4000 yuan/ton. In 2014, the domestic manufacture presented losses volume market, is the worst year since the recent 10 years. Until the end of November 2014, manufacture (the national average price of 4227 yuan/ton, compared with last year the average price of 4618 yuan/ton, down 391 yuan/ton, the annual decline reached 8.47%. In November month this year for an average of 3976 yuan/ton, for almost 10 years since the price for the first time to break the 4000 yuan/ton mark, than the same period last year dropped 11.47%, than the average price fell 10.49% earlier this year.
Volume manufacture in 2014 has boosted exports, imports fell. Since 2012, manufacture volume after the first super imports exports, manufacture first 10 months of this year the breakthrough volume exports of 5 million tons of mark, import and export trade surplus more than 2 million tons. China’s customs, according to data released in January to October manufacture exports totaled 5.024 million tons, surged 52.17% year-on-year; Imports of 2.756 million tons, the same period fell 10.2% year on year. The first 10 months, China’s manufacture roll of net exports about 2.27 million tons, in the last year, more than 200 ten thousand tonnes. Now, manufacture export situation is still good, or close to volume manufacture throughout the year, 2014 exports of 2014 tons.
Manufacture the volume production hit a record high, double-digit year-on-year growth. Because of the cold rolling unit operating focus nearly two years, since 2013, volume manufacture supply has maintained double-digit growth, since the beginning of the year and the average daily output is 230000 tons/day (for production in September). The first 10 months of this year, manufacture accumulative total output of 65.92 million tons, year-on-year growth of 15%; Average daily output of 200000 tons to 220000 tons, compared to last year’s daily average of 190500 tons of production, daily average year-on-year increase of 13.4%.
Had winter no sign, slow social inventory digestion. Domestic manufacture volume inventory since early in 2012 reached an all-time high of 1.731 million tons, two or three years in a row in a state of slow digestion. In late November this year, manufacture inventory as a whole fell to 1.4 million tons, the first 11 months of stock averages 1.518 million tons, 1.623 million tons of average than the same period last year, fell 6.47%, digestion rate rose nearly 4% year on year. This with in the past two years the market circulation atrophy, terminal stock to reduce reservoir action, is closely related to the continuous unilateral downward market trends; While the cold steel mills and the terminal straight for the strengthening of cooperation, is the cause of resources reduce liquid can not be ignored. From the nearly three years inventory trends, manufacture volume market in addition to the passive increase inventory during the Spring Festival, performance is more and more weak, presents downtrend inventory throughout the year.
Terminal industry growth is slowing, demand support efforts to gradually turn small. This year, the manufacture coil terminal industry overall performance, but growth is slowing, and weaker that had been anticipated. The first 10 months of this year, car production volume 19.2701 million, 18.9881 million vehicles, respectively year-on-year growth of 7.93%, 6.58%, respectively, growth is slowing. And home appliances industry expects continued slow growth, in addition to air conditioning industry strong still can maintain double-digit growth, washing machine, refrigerator growth were lower than expected. Environmental requirements and due to the large household appliance product upgrades, manufacture of volume spraying a gradually replaced by the width, roll, galvanized coil products. Therefore, affected by the downstream industry growth is slowing and product upgrading, manufacture (the demand of the market support will gradually turn to small.
Market volume manufacture in 2015 will shock downward
Later, because of the 2015 Spring Festival after the Spring Festival in March, the demand of the market growth is relatively slow, the market lack of time and space of the price. Market, therefore, in the new line production, supply pressure, demand growth is slowing under the influence of unfavorable factors, such as volume manufacture market is expected to give priority to with shock downward trend, market or render high low, after the year the average price fell slightly to 200 yuan/ton, unilateral downward is expected to continue.
Manufacture in new capacity will impact on the market. Industry related statistics show that 2015 has 7 manufacture production line put into production, and in 2014 was not fully release the new line of production, output volume manufacture in 2015 is expected to have 7 million tons to 10 million tons of increment. And, the next 2 years to 3 years, automotive steel production line put into production is relatively concentrated, although the product positioning is high-end, but early products market is still in the form of universal cold spot is more, so will form a big shock to the market. But considering the hong kong-listed trends for production release, so expect full-year 2015 manufacture production volume of 83 million tons to 85 million tons, growth may remain at around 9%.
End demand slowdown. Manufacture volume from 2015 the development of downstream industries, either in the steel mills, manufacturing enterprise or the industry association in 2015 automobile and home appliance demand forecast turned cautious, in addition to the joint venture passenger cars series is expected to maintain 8% ~ 10% growth, 5% of the independent brand car is expected to maintain growth, commercial vehicle growth forecast to 0% ~ 0%. And home appliance industry as a whole is expected next year to maintain 3% ~ 5% of the growth is not easy, what’s more, the real estate industry recession will drag on home appliance consumption. Therefore, downstream industry growth is slowing, next year will affect the demand of volume manufacture.
In addition, unusually prominent manufacture volume export market this year, next year is slightly weaker performance. Is expected to be cautious, total export volume manufacture in 2015 around 5.2 million tons, net exports or fell to 2 million tons.
Support dynamics is expected to continue to reduce the cost. Iron ore prices continue downward trend this year, the whole, the steel iron ore costs still has to fall next year, so the steel support efforts to reduce the cost of the product. And look from the difference between the cold, hot-rolled coil, this year the domestic hot-rolled coil is expected to average about 3300 yuan/ton, manufacture price forecast for 4200 yuan/ton, the difference between the current cold, hot-rolled coil for 900 yuan/ton to 1000 yuan/ton, price difference is too big, so the manufacture market prices still have 200 yuan/ton lower space.