According to data disclosed by the National Bureau of Statistics on March 27, 2023 January-February, the national industrial enterprises above the scale of profits fell 22.9%, of which ferrous metal smelting and rolling processing industry profits fell significantly, losses amounted to tens of billions of yuan.

Specifically, January-February ferrous metal smelting and rolling processing industry to achieve operating income of 119.65 billion yuan, down 6.7%; operating costs of 115.286 billion yuan, down 4.4%; loss of 10.1 billion yuan, down 151.1%.

Among them, from the steel companies, in fact, since the middle of 2022, steel mills have basically been in the dilemma of losing money on all varieties for a long time, with only rebar maintained above the break-even line of steelmaking. The reason for this, industry insiders said, is mainly the decline in profits due to the strength of raw materials.

According to Zhuo Steel Chain Black Research Institute senior analyst Liang Wujian to the Economic Observer reporter, since the middle of last year, in the steel mills of all varieties, only rebar can maintain the state of not losing money. For example, from January to February this year, the average profit of rebar monitored by Zhuo Steel Chain was about 3 yuan/ton, while the profit performance of non-quote-dominated varieties such as hot rolled coil and cold rolled plate coil was even worse.

"Iron ore is overly speculated by speculators, is the main reason for steelmaking losses of steel enterprises in the first two months." Liang Wujian told reporters that the main reason for the loss of steelmaking enterprises in 2022 is the high cost, especially the hidden worries of shortage of upstream iron ore and coke raw material supply, leading to the strong performance of both quotes than finished products. With the easing of Sino-Australian relations and the normalization of Australian coal imports, coke prices have been somewhat suppressed at the beginning of this year, but the market's enthusiasm for iron ore speculation has not yet subsided, combined with the weather of origin, train accidents and other factors, market funds together to push up iron ore prices.

Data show that iron ore prices have continued to soar since November last year. The iron ore futures of the big business since the beginning of November last year less than 600 yuan / ton maximum rise to March 14 of 936 yuan / ton, just a few months, a cumulative increase of more than 55%. During the same period, the highest rebar futures on the Shanghai Futures Institute to 4401 yuan / ton, during the cumulative increase of only about 30%. There is a clear gap between the two, showing the characteristics of "strong mining steel weak".

Looking ahead to this year's steel market, Nanjing Steel chief analyst Zhang Qiusheng said earlier in the 2023 China Steel Logistics Summit Forum hosted by Zhuo Steel Chain with "no sadness, cautious optimism" 8 words to express its views on this year's steel market.

From the cost side, Zhang Qiusheng believes that in 2023, iron ore should not be too bearish, in the case of double increase in supply and demand, the overall relative balance, iron ore prices are expected to be stronger than steel. At the same time, he expects that the supply and demand for coking coal in 2023 will turn from tight to slightly loose, and the center of gravity of domestic coking coal prices will move down throughout the year, but supported by low total inventory, there will not be a collapse of prices.

Zhang Qiusheng said, "Don't give great hope to the steel market this year, mainly because the steel production capacity seriously exceeds demand." His analysis said, "At present, China's annual steel production capacity of about 1.2 billion tons, last year's apparent consumption is 930 million tons, this year's apparent consumption is not expected to exceed 980 million tons. In the context of large excess steel production capacity, if steel mills have high profits, crude steel production is difficult to suppress. Therefore, I think the price of steel this year fluctuates up and down by about 300-500 yuan (per ton)."

For the steel price trend, Zhang Qiusheng expected 2023 steel supply and demand double increase in the steady recovery of the domestic economy, is expected to improve, increased demand, low inventory, low profit pull, steel prices before the low after the high, March-April the first half of the high point, October-November may appear the second high point, the annual steel prices are "M" shape trend.

In the view of Qiu Yucheng, assistant director of the Everbright Futures Institute, the domestic economic recovery is more certain, the second quarter of black commodities supply and demand have further room for improvement, the focus of the market game lies more in the strength and pace of demand pick-up. At the same time, overseas factors on the second quarter steel exports and market sentiment will still form a disturbance. He believes that the overall steel prices in the second quarter is difficult to appear smooth market, the mainstream operating range of 3900-4400 yuan, in the low price range to remain optimistic, the high price range alert to macro risks.