China’s steel consumption in the manufacturing sector is likely to rise in March, mainly prompted by an accelerating resumption of operating activities in industries of steel structures, machinery, and home appliances, Mysteel’s latest report predicted.
In March, steel use in the steel structures industry is expected to grow quickly with the restart of domestic projects and active exports of steel structures.
Among the 89 steel structures companies Mysteel sampled across China, 39 firms replied that their new orders for March delivery posted on-month rises, Mysteel’s survey showed.
Overall, Chinese steel structures companies held relatively low levels of steel inventories at hand in February, as they had been inactive in restocking steel before the week-long Chinese New Year holiday over February 10-17, Mysteel’s report noted.
As construction projects gradually moved forward after China’s Lantern Festival on February 24, steel structures companies began to pick up their paces of steel replenishing, the report suggested.
Another major driver for steel use this month is the vibrant home appliances industry as it braces for its traditional peak season and home appliances manufacturers are actively run promotional activities to kick off the year on a positive note.
Among the 19 Chinese home appliances producers Mysteel sampled, 12 of respondents secured more new orders for March delivery compared with the previous month, Mysteel’s survey found.
The total scheduled production of three major white goods – air-conditioners, washing machines and refrigerators – scored 36.94 million tonnes in March, higher by 17.3% from the actual output in March 2023, according to the latest data released by ChinaIOL.com, a leading domestic information provider serving the home appliance and refrigeration industries.
Besides, sentiment in the home appliances industry is also buoyant recently, as China has in late February proposed to initiate a campaign encouraging large-scale equipment renewals and replacements of consumer goods including home appliances, which will help further stimulate the home appliances market.
Meanwhile, resilient performance was also expected in the machinery industry in March, Mysteel’s report noted. The engineering machinery industry is gradually recovering, with improvements seen in both domestic and overseas orders. Among the 59 machinery companies Mysteel surveys nationwide, 20 firms saw on-month increases in their new orders for March delivery.
Regarding automobiles, the increase of steel use from this industry may be limited this month. Although 21 of the 38 automakers Mysteel sampled across China win more new orders for March delivery, they may tend to digest their relatively high steel inventories at hand instead of replenishing more.
Growth of steel inventory and use in manufacturing industries by end-Feb (MoM, %)
Written by Carly Chen
