Domestic steel demand may be further released

With the unblocking of Wuhan city, China's epidemic has entered a phase of relaxation and stability. In March, as the epidemic prevention and control situation continued to improve, the resumption of production and production of enterprises significantly accelerated. The domestic 21 manufacturing PMIs all rebounded to varying degrees, indicating that market supply and demand have improved. In March, the enterprise production index and new order index were 54.1% and 52.0% respectively, up 26.3 and 22.7 percentage points from the previous month. The production index was 2.1 percentage points higher than the new order index, indicating that manufacturing capacity has recovered.

Infrastructure: According to the statistics of China Economic Weekly in March, 25 provinces, autonomous regions and municipalities across the country have announced their future investment plans. The total investment of 22,000 projects reached 49.6 trillion yuan, of which the total planned investment in 2020 7.6 trillion yuan. "New infrastructure" accounts for about 10%.

In terms of urban railway construction, in accordance with the "Guiding Opinions on Promoting the Development of Municipal (Suburban) Railways" (Development and reform foundation [2017] No. 1173), the railway construction in the Yangtze River Delta region will have a construction investment of 90 billion yuan and a new line mileage of 863 The average cost per kilometer is about 104 million yuan, and the estimated high-speed railway investment in 2020 is about 208 billion yuan. Based on the calculation of 0.333 million tons of steel required for the investment of 100 million yuan, the total investment of high-speed railway in 2020 will be about 69.294 million tons.

The two major construction industries:infrastructure and real estate, have always been the largest steel users in China, and the proportion of these two steel blocks reached 44% in 2019. With the rapid resumption of infrastructure and real estate in China and increasing construction effort. It is expected that in 2020, China's potential steel consumption may develop better year-on-year.