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Which idustries will be heavy affected by the steel price rising?

Which idustries will be heavy affected by the steel price rising?

Issue Time:2021-04-07
Which idustries will be heavy affected by the steel price rising?
This year's steel fundamentals are better than last year, and steel prices may remain high. In the context of the continued strength of steel mill profits, the market has also begun to worry that the continued expansion of profits in the middle of the industrial chain may squeeze downstream profits, causing some downstream factories to be forced to reduce or suspend production. In response to this problem, we will analyze the impact of steel prices on downstream profits and the impact of profits on the output of major downstream products by industry. The results show that the impact of rising steel prices on the profit situation of various industries varies greatly, but in general, the relationship between steel prices and downstream demand for steel is not obvious. The overall production situation of each industry depends more on their respective industries. Downstream demand.
The main downstream industries of steel and the relationship between industry profits and steel prices
As we all know, steel is an important basic industry of the national economy. The main downstream industries of the steel industry include real estate, infrastructure, machinery, automobiles, energy pipelines, shipbuilding, home appliances, etc., of which real estate and infrastructure together account for more than 50% of the total steel demand. The impact on the steel industry is not small.
By comparing steel prices with the average profit margins of listed companies in various downstream sectors, we can see that the profits of the automobile, construction, machinery, and home appliance industries have an obvious negative correlation with steel prices. That is to say, when steel prices are rising, these industries The company’s profits are likely to be eroded. On the contrary, the production profits of real estate, general equipment and railway transportation equipment may be less affected by fluctuations in steel prices.
Of course, the calculation of the correlation coefficient is not completely accurate. For example, if the price of certain raw materials fluctuates in the same direction as the price of steel, the calculation of the correlation coefficient may exaggerate the impact of steel prices on the profit of the industry, and different companies in the industry, even different models of products of the same company Affected by fluctuations in steel prices are all different, but this rough comparison can at least reflect some situations. In the following, we will analyze by industry.
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