【Steel】Analysis of Key Industry Steel Demand in July

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【Steel】Analysis of Key Industry Steel Demand in July

In July, the international environment was complex and severe. The impacts of trade protectionism and unilateralism continued, while some regions in China experienced extreme weather such as high temperatures, heavy rain, and floods, causing short-term shocks to economic operations.

Production supply continued stable growth.

Industrial growth remained relatively fast. In July, the value added of industrial enterprises above designated size increased by 5.7% year-on-year, maintaining a rapid growth trend. Driven by industrial upgrading, the equipment manufacturing sector grew well, strongly supporting industrial growth. In July, the value added of equipment manufacturing enterprises above designated size increased by 8.4% year-on-year, significantly faster than the overall industrial growth rate above designated size.

Investment was affected by high temperatures, heavy rain in some regions, and project construction slowdown, causing a slight decline in investment growth rate, though the investment scale continued to expand. From January to July, fixed asset investment increased by 1.6% year-on-year. The policy effect of large-scale equipment renewal continued to release, further supporting investment growth. From January to July, investment in the purchase of equipment and tools increased by 15.2%, maintaining rapid growth.

Export product competitiveness increased.

Chinese enterprises have vigorously enhanced independent research and development capabilities, accelerated transformation, continuously optimized product structures, and gradually improved technological content. International competitiveness has steadily strengthened, supporting export growth. From January to July, China's exports of mechanical and electrical products increased by 9.3% year-on-year.

From retail sales perspective, products related to trade-in and upgrading performed well. First, the effects of consumption promotion policies continued to appear. The trade-in policy for consumer goods was expanded, continuously boosting sales of related products. In July, retail sales of household appliances and audio-visual equipment, cultural and office supplies, furniture, and communication equipment in units above designated size increased by 28.7%, 13.8%, 20.6%, and 14.9% year-on-year, respectively, all significantly faster than the overall retail sales growth, continuing to support commodity sales growth.

Characteristics of Key Steel-Using Industry Growth:

Steel demand in key downstream industries reached 77 million tons in July, a slight year-on-year increase of 1.5%. Among them, steel consumption in the equipment manufacturing industry performed normally, while construction steel continued to decline. From a year-on-year growth perspective, the growth rate in July was 1.4%, down 3 percentage points from June, reaching the lowest point in the first seven months. From a month-on-month perspective, steel consumption in downstream industries decreased by 14.4% in July. In the first seven months, cumulative steel consumption in downstream industries reached 575 million tons, up 3.9% year-on-year.

Construction steel in key steel-using industries continued to decline.

In July, new housing starts totaled 352.06 million square meters, down 19.4%. Infrastructure investment (excluding electricity, heat, gas, and water production and supply) increased by 3.2% year-on-year. Corresponding monthly indicators of steel consumption in the construction sector decreased by 15.2% year-on-year, with cumulative year-on-year decline of 21%. The monthly year-on-year growth rate of infrastructure investment decreased by 5.4%, with cumulative year-on-year growth of 3.6%.

Equipment manufacturing in key steel-using industries maintained high growth.

In July, all seven industries within key steel-using equipment manufacturing continued to grow. Among them, other transportation equipment, electrical machinery, computers and communications, and automobiles grew by 13.7%, 10.2%, 10.2%, and 8.5%, respectively.

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