There is support for a more balanced recovery in steel demand

The national Bureau of Statistics (NBS) released data today showing that the economic growth in the first three quarters of this year turned from negative to positive. According to preliminary calculation, the GDP in the first three quarters of this year reached 72,278.6 billion yuan, representing a year-on-year growth of 0.7% based on comparable prices.On a quarterly basis, it fell 6.8% in the first quarter, grew 3.2% in the second quarter and 4.9% in the third quarter.

The economic recovery is more balanced

The economic growth rate in the third quarter was slightly lower than previously expected. The September data showed that on the basis of the earlier recovery, the economy has steadily recovered, external demand has continued to improve, domestic consumption has picked up speed, and the economic recovery has become more balanced.

Specifically, driven by consumption and exports, industrial production performed strongly. In September, the value added of industrial enterprises above a certain scale increased by 6.9% year-on-year, 1.3 percentage points faster than that of August and faster than that of the same period last year.

In September, the total retail sales of consumer goods reached 3529.5 billion yuan, up by 3.3% year on year, and the growth rate picked up by 2.8 percentage points, marking two consecutive months of positive growth.From January to September, the total retail sales of consumer goods reached 2,732.4 billion yuan, down 7.2 percent year-on-year.

The cumulative growth rate of fixed asset investment turned positive for the first time in this year. From January to September, fixed asset investment (excluding rural households) nationwide reached 4.3653 trillion yuan, up by 0.8% year-on-year and down by 0.3% from January to August.In a single month, the growth rate of fixed asset investment fell slightly.

The continued recovery of overseas economy has led to a stronger export. In September, the total amount of China's exports (measured in US dollars) increased by 9.9% year on year, among which the export of traditional competitive products such as home appliances and mechanical and electrical products continued to improve.Foreign supply resumed, domestic production entered the traditional peak season, enterprises are more willing to purchase, the total amount of imports (in DOLLARS) increased by 13.2% year on year.

Real estate investment continues to top manufacturing production expectations

From January to September, the investment in infrastructure increased by 0.2% compared with the same period last year, and dropped by 0.3% from January to August. The growth rate turned positive for the first time this year.The impact of tightened financing is not obvious yet, and real estate investment is still resilient. From January to September, investment in real estate development nationwide was 1.03484 trillion yuan, an increase of 5.6% over the same period last year, with the growth rate accelerating by 1.0 percentage points and the monthly growth rate remaining at a high level.Corporate earnings improved, credit support intensified, and manufacturing investment maintained its trend of recovery. From January to September, manufacturing investment declined by 6.5%, or 1.6 percentage points less.

Manufacturing output exceeded forecasts, rising 7.6 per cent year-on-year in September, up 1.6 percentage points.In September, the added value of metal products industry, general equipment manufacturing industry, electrical machinery and equipment manufacturing industry increased by 12.6%, 12.5% and 15.9% year on year respectively, all higher than the overall growth rate of the manufacturing industry, and picked up from the previous month.Among the related products, the output of metal-cutting machine tools and industrial robots increased by 20.6% and 51.4% year-on-year respectively, the output of generator sets increased by 24.6% year-on-year, and the output of automobiles increased by 13.8% year-on-year.

Economic growth continued to pick up in the fourth quarter

In the third quarter, the effects of counter-cyclical adjustment policies were concentrated. Together with the recovery of the endogenous growth drivers of the economy, the economy maintained recovery growth, consumption, manufacturing and production indicators were better than expected, and the recovery structure was more balanced.The economic recovery in the fourth quarter will slow down, but it is still on the path of recovery. At present, the accumulative growth rate of consumption is still negative, and there is still room for further recovery.In terms of investment, the total planned investment in new projects started in the first three quarters increased by 14.6% year on year, 1.1 percentage points faster than that in the first half. Investment in the fourth quarter is expected to continue to pick up.

Investment points plate, due to demand release and upgrade, in September, commercial housing sales growth of highs, commenced area of new growth during the month turns negative, real estate investment momentum marginal abate, financing and heavily regulated pressure will increase the enterprise funds, construction completion or speeding up, the stock of construction is the important support for the fourth quarter of real estate investment;Economic growth has picked up fairly quickly, and there is less urgency for infrastructure investment to continue to increase. However, with the accelerated use of fiscal funds, the growth rate is expected to remain relatively high in the fourth quarter.Manufacturing investment is expected to continue to repair upward as demand picks up and production expands.

Policy adjustment to normal

On the one hand, we will continue to help the economy return to its potential growth level steadily. On the other hand, we will make it a priority to strengthen risk control and foster new growth drivers.

At present, there are many risks in the economic sector, such as high leverage ratio and local debt. After the economic endogenous momentum gradually recovers, the policy will pay more attention to the balance between risk prevention and steady growth. For example, recently, we have strengthened supervision on the financing of real estate enterprises, set "three red lines" to limit the increase of leverage of enterprises and prevent risks in the real estate sector.

In addition, with a view to the long-term development of the economy, the main driving force is to accelerate the cultivation of new growth drivers.The guidance issued by the National Development and Reform Commission, the expansion of investment in emerging industries, the adoption of the new energy automobile industry development plan by China's regular meeting and the development and expansion of the automobile industry at the stage of technological transformation are all conducive to fostering new growth points.In the field of investment, we will promote the construction of the "two new priorities" and explore more new and effective areas of investment growth in ecological and environmental protection and key technologies.

Steel demand is supportive

At present, the real estate investment maintains a high growth rate and is expected to decline gradually in the later period, which will not have a very severe impact on steel demand, and the construction of the project will also drive the steel demand.Infrastructure investment fell short of previous expectations, but accelerated fiscal spending is expected to give some boost to infrastructure investment.The construction business activity index was 60.2 percent in September, while the new orders index and business activity expectations index were 56.9 percent and 67.8 percent in September, reflecting the still high construction business climate and support for construction steel demand.

With the recovery of the endogenous growth momentum of the economy, the pull effect of improved demand on production will continue to appear, manufacturing production will maintain the expansion trend, manufacturing investment growth is also expected to pick up further, and steel used in the manufacturing industry will remain resilient.

Overall, macroeconomic investment to maintain a high level of steel demand is unlikely to reduce rapidly.At present, both steel output and steel social inventory are at a relatively high level. The low season is approaching, and the demand gradually turns weak after entering the winter. High output and high inventory will have a greater impact on the steel market, and steel mills need to reduce production and inventory to improve the market supply and demand.