In November 2018, domestic steel output was 18.571 million tons, and the monthly decrease was 2.90 %, an increase of 10.14 % year-on-year; The cumulative output from January to November was 19.872 million tons, an increase of 4.88 million tons, or 2.62 % over the same period last year. In November, domestic wire(coil) production was 13.155 million tons, a 1.18 % decrease in the ring ratio, an increase of 24.39 % year-on-year. From January to November, the cumulative output was 132.716 million tons, an increase of 1115,000 tons over the same period last year, an increase of 9.04 %. In addition, the statistics of the China Steel Association show that the estimated daily value of the key steel companies in early December was 1,872,200 tons, an increase of 2.07 % over the previous year, an increase of 5.24 %. The National estimate was 2,400,700 tons, an increase of 2.16 % over the previous year, an increase of 7.82 %.

3, domestic steel import and export status analysis
In terms of data on steel imports and exports, the General Administration of Customs data show that in November 2018, China's steel exports totaled 5.298 million tons, a decrease of 201,200 tons, or 3.67 percent, the lowest level since February this year. From January to November, a total of 63.778 million tons of steel were exported, compared with 69.751 million tons in the same period last year, down 8.6 % year-on-year. In November, China imported 1.057 million tons of steel, a drop of 81,000 tons from the ring, a decrease of 7.12 %; From January to November, a total of 12.16 million tons of steel were imported, compared with 12.097 million tons in the same period last year, an increase of 0.5 % over the same period last year.
Recently, the State Council Tariff Tariff Committee issued a notice stating that China has adjusted the import and export tariffs of some products since January 1, 2019, among which the export provisional tariff of 5 % of 200 stainless steel is cancelled; Removal of the provisional export duty of 5 % or 10 % of ingots and billets; Elimination of the provisional tariff on 10 per cent of iron ore exports; Cancellation of the provisional export duty of 10 % for some ferroalloys such as ferrosilicon, ferrotitanium and ferrosilicon, ferrovanadium and ferroniobium; Elimination of the temporary export tariff of 10 % of direct reduction iron; Remove the provisional export duty of 3 % coking bituminous coal. This adjustment of import and export tariffs of some products is conducive to the steady growth of import and export trade.
4, next month's steel supply expectations
Taken together, the average daily output of crude steel in China in November was 2.5873 million tons, which fell 2.84 % from October and fell for two consecutive months. In December, domestic cooling, rain and snow weather increased, outdoor terminal construction was affected, and the market transaction dropped significantly. Many domestic steel companies carried out routine maintenance, plus some northern steel companies limited production environment, and the National blast furnace operating rate decreased for five consecutive weeks. With more rain and snow cooling weather in China, downstream procurement needs have become more and more sluggish, more steel companies arrange safety and routine maintenance, it is expected that the average daily production of domestic rough steel will continue to fall next month.
III. Demand Situation
1, steel sales trend analysis
In early December, due to the suspension of the imposition of tariffs by the United States and China and the United States, and the desire to increase after the collapse of steel prices, market prices rebounded. Most terminal purchases have significantly increased, market turnover has been released, and demand has slowed again after rising prices. In the middle of the 12th, the temperature of rain and snow in the country increased, outdoor construction was disturbed, downstream procurement demand was slowing down, and steel prices were in the shock phase. In late December, steel prices weakened, downstream users purchased on demand, and funds were relatively tight at the end of the year. The overall market transaction was not satisfactory. In the middle and early next month, most of the construction sites will end one after another before the end of the year, and the demand for the later period will gradually decrease.
2, domestic construction investment quota analysis
In terms of fixed asset investment, China's fixed asset investment(excluding rural households) was 609.267 billion yuan from January to November 2018, an increase of 5.9 % year-on-year, and the increase rate rose 0.2 percentage points from January to October. In terms of speed, investment in fixed assets(excluding farmers) grew by 0.46 per cent in November. In terms of sub-industries, the investment in the primary industry was 2128.5 billion yuan, an increase of 12.2 % year-on-year, and the growth rate fell by 1.2 percentage points from January to October; The investment in the secondary industry was 2,278.17 billion yuan, an increase of 6.2 %, and the growth rate increased by 0.4 percentage points. The investment in the tertiary industry was 36016.5 billion yuan, an increase of 5.6 %, and the growth rate increased by 0.2 percentage points.
In terms of real estate investment, from January to November 2018, China's real estate development investment was 1108.3 billion yuan, an increase of 9.7 % year-on-year, and the growth rate was the same as from January to October. The new construction area in January and November was 18.889 million square meters, an increase of 16.8 %, and the growth rate increased by 0.5 %. From January to November, the construction area was 804.886 million square meters, an increase of 4.7 % year-on-year, and the increase in speed was 0.4 % from January to October. From January to November, the land acquisition area was 253.26 million square meters, an increase of 14.3 % year-on-year, and the increase rate fell by 1 % from January to October; From January to November, development companies put funds in place 15007.7 billion yuan, an increase of 7.6 % year-on-year, and the growth rate fell 0.1 % from January to October.
In terms of infrastructure investment, infrastructure investment(excluding electricity, heat, gas and water production and supply) increased by 3.7 % from January to November 2018, the same rate as that of January to October. Among them, the investment in the water Conservancy management industry fell by 4.4 %, a decrease of 0.3 percentage points; The investment in public facilities management increased by 1.4 %, an increase of 0.1 percentage points. The investment in the road transport industry increased by 8.5 %, and the growth rate fell by 1.6 percentage points. Investment in the railway industry fell 4.5 per cent, a 2.5 percentage point reduction.
In terms of manufacturing investment, from January to November 2018, the value added of industries above designated size increased by 6.3 % in real terms compared with the same period a year earlier, slowing by 0.1 % from January to October. In November, the added value of industries above designated size increased by 5.4 % year-on-year, and the growth rate fell by 0.5 % from October, mainly affected by three industries. First, the impact of the slowdown in automotive consumption growth, the value added of the automotive manufacturing industry fell by 3.2 % year-on-year, the second consecutive month of year-on-year decline; Second, global oil prices fluctuated in November, and the petrochemical industry's growth rate dropped to 1.9 % from 4.4 % last month. Third, growth in the electronics sector slowed from 14.6 per cent to 12.3 per cent, down 2.3 per cent from the previous month.
3, next month's steel demand forecast
From January to November, the National real estate development investment increased by 9.7 % year-on-year, and the speed increase ratio remained the same from January to October. In terms of sub-indicators, the growth rate of the new construction area of real estate has slightly increased, but the construction area, land acquisition area, development funds and sales area have all declined slightly, of which the sales area has fallen for three consecutive months. In December, the weather throughout the country cooled down. The weather was obvious. Most of the outdoor construction in the North was difficult to carry out. Most of the construction sites were already suspended. Relying on recent years, the vast southern construction site is about to end years ago. It is expected that the demand for construction steel will drop significantly next month.

Cost Analysis
1, raw material cost analysis
The price of raw materials in December performed differently, of which Coke prices stabilized before falling; The domestic mine price is mainly stable, and the import mine price has successively increased; The price of billets has risen sharply, and the price of scrap steel has risen mainly. According to the monitoring data of the Nishimoto Shinkansen, as of December 27, the factory price of the carbon billet in the Tangshan area was 3,380 yuan/ton, which was 300 yuan/ton higher than the price at the end of last month; The price of scrap steel in Jiangsu Province was 2,490 yuan/ton, which was a big increase of 170 yuan/ton from the end of last month; The price of secondary Coke in the Shanxi region was 1,490 yuan/ton, which was 150 yuan/ton lower than the end of the previous month; The price of dry base iron powder in Tangshan area is 720 yuan per ton, which is the same as the price at the end of last month; Pullman's 62 % iron ore index was $72.40 per ton, up $6.95 from the end of last month.
In terms of varieties, domestic billet prices rose sharply in December. From the price point of view, since December, the domestic billet market mentality has resumed, billet prices have rebounded in excess, and market prices have risen sharply. At the same time, the smog weather in the northern region is serious, and some billet production enterprises have limited production in environmental protection. The supply of billet has decreased, and billet merchants have increased their sales psychology. As of December 27, Tangshan's carbon billet containing tax quotes were 3,380 yuan/ton, an increase of 300 yuan/ton from the end of November, an increase of 9.74 %; The total stock of Hongrun and Xiangyu Zhengfeng billets in Tangshan Haiyi totaled 131,900 tons, a cumulative decrease of 134,100 tons from the end of last month, a decrease of 50.41 %. It is expected that domestic billet prices will fall before rising next month.
In December, domestic Coke prices weakened. From the market point of view, from the beginning of this month to the middle of the year, domestic Coke prices experienced a four-wheel drop in prices, Coke profits have also shrunk significantly, a handful of coke companies have raised their voice, but downstream steel companies do not accept. In addition to the severe smog in the northern regions, some steel companies and Coke companies are subject to environmental protection restrictions. Most steel companies implement on-demand procurement, the market transaction has slowed down overall, and the market has a strong wait-and-see atmosphere. Near the end of the month, domestic steel companies have increased the number of repairs and restrictions on the production of blast furnaces, the rate of blast furnace operation has continued to decline, and the stock in Coke factories is relatively sufficient. Some coke companies in Hebei and Shanxi have once again fallen in price. Considering the decline in downstream procurement demand, the market sentiment has been low, and it is expected that domestic Coke prices will still have a downward trend next month.
Domestic scrap prices rose sharply in December. From the market point of view, in mid-December, after the price of domestic products fell, it rebounded, enhancing the confidence of the scrap steel market, the domestic weather was low, rain and snow weather, the difficulty of the acquisition of scrap steel increased, and some steel mills increased the stock of scrap steel. The downstream steel companies provided scrap steel purchase prices one after another. From the perspective of East China, a number of steel companies such as Shagang, Magang, Nangang, and Zhongtian raised 100 yuan on December 13 and 80 yuan on December 19, respectively, for a cumulative increase of 180 yuan. In late December, as the price of finished products fell and the scrap steel market fell, the purchase price of steel mills such as Shagang was reduced by 30 yuan on December 26. The rest of North China, Northwest China, Northeast China, South China and other regions have similar price trends. Considering that most steel companies have sufficient stocks of scrap steel, as well as increased maintenance of steel equipment, it is expected that domestic scrap steel prices will fall next month after stabilising.
In December, the domestic iron powder market was stable and rising. Due to the severe smog in the northern regions, the Environmental Protection restrictions in Hebei and Shanxi were strictly enforced. The supply of iron powder was low, and ore traders were reluctant to sell. Most market quotes were strong. The price of the main production area rose slightly. The price of imported iron ore has risen this month, with a 62 % iron ore index of $72.40 per ton as of December 27, up $6.95 a month from the previous month. In terms of port inventory, as of December 28, the inventory of imported iron ore in major ports in the country was 141.73 million tons, an increase of 1.21 million tons from the end of last month. On the whole, in the first half of the year, the amount of imported minerals to the port remained low, and the stock of ore in the port fell continuously and was below 140 million tons. Ore futures contracts rose sharply, shipping costs and product prices rose, and import prices rose.; In the second half of the year, the import of minerals to the port slightly increased, and the stock of port ores regained more than 140 million at the end of the month. The market price of finished materials fell weakly, and the market watched closely. Consider next month's Lunar New Year approaching, blast furnace operating rate continued to decline, a few steel companies a few years ago appropriate replenishment, is expected to import iron ore prices next month will fall.
The overall performance of the BDI index in December was impressive. As of December 24, the Baltic Dry Cargo Price Index(BDI) closed at 1271 points, up 40 points from the end of last month, an increase of 3.25 %. As of December 21, the Shanghai shipping exchange's integrated China coastal(bulk) tariff index closed at 1066.17, up 2.1 % from last week. Among them, the index of coal, metal ore, and refined oil freight rates rose, the index of grain freight rates fell, and the index of crude oil freight rates remained stable. The coal freight index closed at 1099.20, up 3.1 % from last week. Qinhuangdao-Shanghai(4-5 million dwt) route freight rate is 26.9 yuan/ton, down 1.0 yuan/ton from last week; The Qinhuangdao-Zhangjiagang(4-5 million dwt) route freight rate was 29.1 yuan/ton, which was 1.3 yuan/ton lower than last week; The qinhuangda-guangzhou(6-700dwt) route had a freight rate of 33.1 yuan/ton, down 1.2 yuan/ton from last week. It is expected that the BDI index as a whole will fall before rising next month.
2, steel ex-factory price analysis
This month, domestic sheet steel companies Baosteel, Angang, Wugang, Hegang, Angang, etc., successively announced the factory price in January 2019, in the face of domestic downstream orders to reduce consumption, the decline in export trade demand, the market expectations are not satisfactory. All were reduced to 200-300 yuan/ton for hot rolling, cold rolling, medium thick plate, hard rolling, color coating, and galvanizing. Judging from the production of steel mills for construction, most steel mills that have been adjusted by the day have risen in price, and steel mills that have made up prices by ten days have fallen sharply. Judging from the exit price of Shagang, the leading steel mill in Jiangsu Province, the thread price dropped sharply by 500 yuan in early December; Middle thread price to maintain flat plate, to complete the planned amount and fund to account to give 80 yuan to make up; The late thread was significantly reduced by 80 yuan, and the completion of the plan and the funds to the account gave 180 yuan to make a substantial difference. In addition, Northern steel companies such as Hegang, Xilin, Jianlong, Axin, Siping Hyundai, Xinda and Daan have successively announced winter storage and lock price policies. It is expected that next month's steel price adjustment policy still has room to reduce.
3, next month steel cost forecast
In summary, in the middle of December, domestic Coke prices stabilized, Coke companies 'profits contracted significantly, downstream steel companies purchased according to needs, steel Coke games showed a stalemate, and the market looked at the atmosphere was strong; In the late into the coke plant inventory increased, downstream steel enterprises reduced production and repair increased, Coke prices fell momentum. Domestic mines are limited by the Environmental Protection of the northern atmosphere, spot inventory pressure is not large, Shanxi, Hebei and other major production areas, the price of iron fine powder in most regions remained stable. The overall price of imported minerals has risen sharply, mainly due to the fact that the total volume of foreign ore shipments is not high, the overall stock of ore in the port has dropped, and it has fallen below 140 million tons. The overall price of sea freight has risen, and market confidence has generally been relatively good, driving the price of imported minerals to rise. Considering the decline in domestic Coke, import mines continue to increase resistance to increase, it is expected that construction steel production costs will be lower next month.

Macro analysis
First, the Politburo meeting will focus on stability and steadily promote large-scale tax cuts
The Political Bureau of the Central Committee held a meeting on December 13 and pointed out that it will continue to play a good role in the three major offensives and battles, focus on stimulating the vitality of the microentities, innovating and improving macroeconomic regulation, and comprehensively promoting steady growth, promoting reform, restructuring, improving people's livelihood, and preventing risks, so as to keep the economy operating within a reasonable range. We will further stabilize employment, finance, foreign trade, foreign investment, investment and expectations, and boost market confidence. Recently, Wang Jun, party secretary and director of the general administration of taxation, presided over an enlarged meeting of the party committee to convey the spirit of learning from the central economic work conference and to study and deploy measures for implementation. We have given important instructions and put forward clear requirements for deepening tax reform, implementing tax reduction policies, and optimizing tax enforcement methods, which have pointed out the direction and provided compliance for tax work. Premier Li's important speech summarized the economic work in 2018, analyzed the current economic situation, and made specific plans for tax work next year.
Investment in real estate grew at the same rate, and a large number of infrastructure investment projects were approved
From January to November 2018, China's investment in real estate development was 1108.3 billion yuan, up 9.7 percent from a year earlier, according to the National Bureau of Statistics. The new construction area in January and November was 18.889 million square meters, an increase of 16.8 %, and the growth rate increased by 0.5 %. From January to November, the construction area was 804.886 million square meters, an increase of 4.7 % year-on-year, and the increase in speed was 0.4 % from January to October. From January to November, the land purchase area was 253.26 million square meters, an increase of 14.3 % year-on-year, and the increase rate fell by 1 % from January to October. In terms of infrastructure investment, infrastructure investment(excluding electricity, heat, gas and water production and supply) increased by 3.7 % from January to November 2018, the same rate as in January to October. In addition, a large number of recent infrastructure investment projects have been approved. In the past month, the National Development and Reform Commission has approved a number of urban rail transit projects in Shanghai, Hangzhou, Jinan, and Chongqing, with a total investment scale of nearly 500 billion yuan. A total of 1,346 new projects of more than 100 million yuan were started in Guizhou Province from January to November, with a total investment of 86.92 billion yuan; This year, Hebei Province has invested more than 800 billion yuan to complete the project.
China and the United States suspend further tariff increases
China and the United States announced on December 2 that they had reached an agreement to suspend further tariff increases. President Donald Trump said on December 3 that China-US relations have taken a big step forward with a trade truce. American farmers will benefit from China's agreement to import more American produce, and Beijing has agreed to "reduce and eliminate" tariffs on American cars. The two sides will bridge their differences on compulsory technology transfer, intellectual property protection, non-tariff barriers and cyber attacks. At the same time, China is prepared to send a large delegation to the United States to continue negotiations. In addition, on December 19, local time, the Federal Reserve announced an increase in the target range of the federal funds rate by 25 basis points to 2.25-2 .50 %. It was the fourth time the Fed has raised interest rates this year and the highest rate in more than a decade. On two occasions before and after the Fed's policy meeting on December 17-18, Mr Trump publicly said he did not want the Fed to raise interest rates, saying the Fed should "feel the market, not just look at meaningless numbers". Domestic markets are widely expected to raise rates, but the focus will be on the interest rate outlook for next year.
International Market Chapter

According to the combined data(shown above), more than half of the international market for spiral steel fell in December, with minor adjustments in Europe, stabilisation in Asia and most declines in the Middle East. The specific data are as follows:
Us and European markets: U.S. steel prices remained flat in December compared with the same period in November, with U.S. import prices falling by $22 a ton. During the same period, EU steel prices rose by $5 per ton and German market prices fell by $1 per ton.
On the Asian side: In December, prices in the Chinese market fell by $7/ton compared with the same period in November, and Chinese export prices fell by $10/ton; The South Korean market quotation is relatively stable; Japanese market prices rose by $10 per ton and export prices were flat. In addition, Middle Eastern import prices fell by $10 per ton, Turkish export prices fell by $50 per ton and CIS export prices fell by $20 per ton.
In terms of billet prices: In December, the Turkish export offer(FOB) fell by $55 per ton compared with the same period in November, and the CIS export Black Sea offer(FOB) fell by $19 per ton; Middle Eastern imports fell by $10 per ton, while South-East Asian imports fell by $30 per ton.
In summary, more than half of China's export quotes fell in December in the international steel market. International steel prices are expected to weaken in January 2019 as the Chinese Lunar New Year approaches and the global steel market turns into a slow consumer season.
VII. Comprehensive perspectives
A comprehensive summary of the contents of the December 2018 analysis report, we analyzed that the domestic steel price base operating conditions in January 2019 are as follows:
First, the demand dimension. In December, the low-temperature rain and snow weather in the country increased, the overall market demand fell sharply, and the demand in the northern region fell into the freezing point. The characteristics of the off-season market market were even more obvious. From January to November, real estate investment and infrastructure investment both grew at the same rate. Among them, sub-indicators such as commodity housing sales and land transactions fell for three consecutive months. Although infrastructure projects have received a lot of approvals, infrastructure needs to be just low in the near future. The year-end cash flow in the market is relatively tight, to a certain extent affecting the site procurement needs, steel market overall transactions are becoming light. Considering next month's approach to the Lunar New Year, migrant workers in the southern region will return home around January 10-15. Many projects will end before the end of the year, and market demand will drop sharply.
Second, the supply side. According to statistics, as of December 31, the total stock of steel varieties in major markets in China was 8,078,700 tons, a decrease of 249,400 tons from the end of November, a decrease of 2.99 %. It is reported that by November, domestic steel-enterprise rate of return fell sharply, a number of domestic steel enterprises arranged for routine overhaul. At the same time, the smog weather in the northern regions continued to be serious, and steel companies in Hebei and Shanxi and other regions implemented the wrong peak production. The operating rate of domestic blast furnaces fell for five consecutive weeks, and the overall inventory was at a low level within the year. By the end of this month, steel mills and social inventories are both small accumulations, considering the next month's weaker demand, the market inventory will be accumulative.
Third, cost factors. In November, domestic Coke experienced four rounds of sharp declines, domestic Coke companies suffered a sharp decline in profits, and Coke stabilized in December. Towards the end of December, Coke companies had a backlog of in-plant stocks, slow procurement rhythm of downstream steel companies, and year-end capital recovery and profit and loss calculations. Coke prices start the fifth round of decline. December domestic mine price performance strong, some of the main production areas rose slightly, the market overall transaction. Import prices were strong in December, rising by $6.95 from the end of November. As the port inventory fell, blast furnace operating rates continued to fall and prices continued to rise significantly under pressure. Production costs for domestic steelmakers are expected to fall in January.
Fourth, macro factors. In 2018, the Sino-U.S. trade war began with the US Federal Reserve raising interest rates by 25 basis points for four consecutive quarters, the purchasing power of emerging market currencies has dropped sharply, the global economic manufacturing industry has weakened, some geopolitical frictions have become more dangerous, the domestic market economy has slowed down continuously, and investment in infrastructure has been seriously deficient. The scale of social financing has shrunk significantly. Although real estate investment is at a high level, investment has declined continuously after the fourth quarter. In the face of the complex economic situation at home and abroad, the meeting of the Political Bureau of the Central Committee will focus on stability in economic deployment next year, increase investment in infrastructure to make up for shortcomings, advance tax cuts and fees to reduce the burden on enterprises, and step up reform efforts and structural adjustment. We will further stabilize employment, finance, foreign trade, foreign investment, investment and expectations, and boost market confidence.
To sum up, domestic steel prices are in the low stage of consolidation in December. On the one hand, terminal demand is shrinking, steel prices lack the incentive to rise, on the other hand, steel prices are positive, social stocks are low, and steel prices are strongly supported. About to enter January 2019, the demand in the North has already fallen into the freezing point. The demand in the South ended around mid-January. At the end of the year, the capital surface was even more tense. Market demand dropped sharply, steel prices faced a further decline, and steel prices fell again in mid-to-late January. Not significant. It is expected that in January, domestic steel prices will be stabilized before or after the stabilization. Based on this, the domestic steel price index will operate in the range of 3880-4080 yuan/ton oscillations.