1. The prospect of macroeconomic situation and its main influence in the late stage
GDP growth fell again to a nearly three-year low of 7.4% per cent in the 3 quarter of 2012, indicating a downward trend in the economic downturn in the 3 quarter, but data at the end of the 3 quarter suggested that the decline in economic growth was already showing signs of bottoming out and that the economic situation in the 4 quarter would be at the bottom of a hovering, steady recovery.
Annual GDP growth is likely to sustain 7.6-7.8% growth. However, the stabilization of economic growth after the 4 quarter will be largely due to the increase in infrastructure investment and the implementation of various consumer stimulus policies, and the contribution of external demand to the recovery of the economy may grow at a limited rate.
This trend of economic development will have a certain positive impact on the steel industry. Since the 3 quarter, in order to achieve the goal of "guaranteed growth", the relevant departments have significantly accelerated the progress of project approval, and strengthened a number of projects such as Key Water Conservancy project, basic transportation, rural power grid and other areas of public facilities in the pre-work. According to data released by the NDRC, the September NDRC only announced that approved projects, including urban rail projects, road projects, municipal projects, port waterway projects, and so on totaled more than 50, the total investment scale of more than 1 trillion yuan. And throughout the 3 quarter, the NDRC announced a total investment of more than 500 million of the approved projects.
Considering that there is generally a lag of more than 3 months between the approval of the project and the implementation of the supporting funds, we expect that the projects will enter the centralized construction period in the 4 quarter. At the same time, local governments have also formulated a large number of investment planning, incomplete statistics, all over the government "to ensure growth" investment planning has reached 17 trillion, although limited by the source of funding, local government planning is still more than the "pastry" stage, it is difficult to form a real investment in a short period of time, but its role can not be underestimated.
2. 4 quarter and 2013 steel industry trend outlook
On the whole, the improvement of the economic situation will have a certain positive impact on the steel industry, although the steel industry is still difficult to get out of the quagmire in the 4 quarter because of the constraints of overcapacity, but market demand, production and marketing prices and industry profits may be slightly better than 3 quarters. From the steel supply level, we believe that steel production in the 4 quarter is likely to increase slightly in the 3 quarter, and it is more likely that it will exceed 180 million tonnes again.
Exports take into account the continued weakness of external demand, increased trade frictions and the weakening of the export price advantage caused by the re-rise in domestic steel prices, etc., are likely to decline, and crude steel exports are expected to remain around 13 million tonnes in the 4 quarter. Imports are expected to remain stable for the 4 quarter, although import demand for steel is likely to grow from 3 quarters as domestic railways and other infrastructure projects increase, with imports of crude steel expected to remain at around 4 million tonnes. Total imports and exports in the 4 quarter crude steel apparent consumption will remain at a level slightly higher than the crude steel consumption in the 3 quarter, expected to be more than 170 million tons. Overall, in the context of overcapacity and slow economic growth, the situation of oversupply of steel products will not change in the 4 quarter, so both crude steel production and apparent consumption in the 4 quarter were more difficult to show significant growth.
Production and apparent consumption of crude steel in 2013 are expected to maintain a low rate of growth as the economy recovers slowly, but it will be difficult to increase significantly compared to 2012. Crude steel demand is expected to increase by about 300.05 billion tons in 2013 compared with 2012, so crude steel production will remain at this level compared to the 2012 increase, the annual crude steel production maintained at about 750 million tons, the annual crude steel apparent consumption maintained at about 7.1-730 million tons.
NET exports are close to par with this year and remain up and down 40 million tonnes. On the demand side, the 4 quarter was mixed, on the one hand, the traditional steel consumption season in the early 4 quarter, especially after the construction phase of new projects in various localities will increase the consumption of steel, but on the other hand, the late 4 quarter will be in the traditional low season of steel consumption, The increasing difficulty of building construction in the northern region will reduce the demand for construction steel significantly.