According to the PMI of the steel industry investigated and released by the Iron and Steel Logistics Committee of the China Union of Things, it will be 33.0% in July 2022, down 3.2 percentage points month on month. The operation of the steel industry continues to be sluggish. From the change of sub indexes, the characteristics of the market in the off-season are obvious, the market demand is low, the production of steel mills has declined, and the prices of steel and raw materials have continued to decline. It is expected that in August, the market demand will pick up and the production of steel mills will tend to recover, driving the price of steel and raw materials to rebound slightly.
In July, the domestic steel market demand operated at a low level and recovered slowly. There are several reasons for insufficient market demand. First, the continuous hot and rainy weather has led to the short-term seasonal off-season of the steel market. Second, the investment in real estate mainly made of steel is not optimistic, and the support for steel demand continues to weaken. From January to June, the investment in real estate development decreased by 5.4% year on year, and the area of newly started houses decreased by 34.4%. The real estate development boom index in June was 95.40, which is lower than the theoretical threshold. The current decline of the domestic real estate industry is difficult to change in the short term, and continues to decline under the influence of the supply and loan interruption event in some regions. Third, the international situation has become more serious and complex. Downward pressure on major economies has increased, and external demand has contracted. In combination, the demand for steel continued to shrink in July, with the index of new orders at 25.9%, unchanged from the previous month and below 30% for two consecutive months. The index of new export orders was 39.4%, down 7.7 percentage points from the previous month. The steel terminal market started slowly, and the market confidence was significantly insufficient. From the monitored data of terminal line screw procurement in Shanghai, the recovery of terminal procurement in Shanghai in July was limited, far lower than the level of the same period in previous years.