This is the best of times, but also the worst of times. For steel mills, the current is tighten my belt. Since the second half of last year, have hisin, Westwood steel, chuan wei steel companies fall into the predicament of the capital chain rupture. Once money iron and steel industry is now the worst money.
Under the pressure and contradiction between supply and demand on funds, the steel industry. And now as the central bank to cut interest rates boots be born, hong kong-listed “money shortage” dilemma can be changed?
Cut interest rates again after 30 months
The people’s bank of China, since November 22, 2014 cut in financial institutions RMB loan and deposit rates. Financial institutions one-year benchmark lending interest rate by 0.4% to 0.4%; Benchmark one-year deposit interest rate by 0.25% to 2.75%, while the financial institutions deposit rate floating range limit by 1.1 times of the benchmark deposit rate 1.2 times.
For the policy change, the head of the central bank said in an interview with the media, ease the financing difficulties of small and medium-sized enterprises is the key direction. “At present, our country economy continues to run in a reasonable range, positive alterations in economic structure adjustment, but the real economy, ‘financing difficulties, financing your questions are still prominent. After launched a series of measures of the state council in July this year, officials have done a lot of work, the financing difficulties, financing your present a tendency of ease in some regions and areas. But in a downward pressure on economic growth, structural adjustment, enterprises in the period of climbing difficulty increased, under the condition of some enterprises, especially small micro enterprises to bear the cost of financing ability to reduced. To solve enterprises, especially small micro enterprise financing cost high question, for steady growth, is of great significance to promote employment, livelihood.” , “said the head of the interest rate adjustment, the emphasis is to play to the benchmark interest rate guide, a targeted market interest rates and downward social financing cost, promote the real interest rate gradually return to a reasonable level, alleviate this prominent problems of enterprise financing costs for sustainable and healthy economic development to provide neutral moderate monetary and financial environment.”
Industry analysts said the interest rate adjustment is still belongs to the normal operation, does not mean that monetary policy orientation change. The current our country economy to maintain in a reasonable range, the price increase overall shows down trend, central Banks need to the fundamentals of the economy run situation, the flexible use of interest rate tools for fine-tuning, the adequate level of real interest rates.
Steel mills for hopping on the window
For the current steel industry, the fund is undoubtedly the most headache problem.
Data show that as of September, the national large and medium-sized steel mills ratio is 68.81%, is 69.53%, and the same period last year dropped 0.72% year-on-year. The large and medium-sized steel enterprises long-term loan of RMB 983 billion, short-term loans of 359 billion yuan, total 1.4 trillion yuan.
And based on Wind data, as of August 31, and 33 listed steel companies, there are 18 steel mills asset-liability ratio over 70%, accounted for 54.5%. Among them, bayi iron and steel, fushun special steel, steel songshan, valin iron and steel, chongqing iron and steel, xining special steel six mills asset-liability ratio has reached 80%.
Capital chain is weak, and the Banks are tightening credit process. This intangible added to steel mills operating pressure. Now the central bank to cut interest rates for capital chain stretched tightly mills is urgently needed.
, according to a local bank credit from the loan interest rates by 0.4% ways, such as to calculate the one-year borrowing time limit, the next year, the interest burden of iron and steel enterprise, in theory at least 5.2 billion less. For iron and steel enterprise was in debt, also less means day easier.
Cisa figures show, while the key steel mills in September this year 1 ~ continue to remain profitable main business profit, but the enterprise funds continue to tighten. 7.48% year-on-year increase in the first three quarters of large and medium-sized steel enterprises during the expenses, including financial costs rose 22.88% year-on-year, accounts receivable accounts payable are surging, including accounts receivable year-on-year growth of 16.78%, accounts payable year-on-year growth of 10.97%, to cut interest rates for the beleaguered steel companies have showers.
Financial distress can improve?
Although Banks less a month the rate cut will make steel mills also bank 35, but simple interest rates do not reverse the trend of capital chain tension, iron and steel industry and lead the industry out of the woods.
Consider mainly according to reporter understanding, bank loan risk, and high interest rates of loans once unable to recover the cost of bad loans, so the Banks to lend this year, with the benchmark lending interest rates, big corporate loans bargaining power is strong, can obtain the benchmark interest rates of loans; And small businesses in a weak position, the bank will raise the loan interest rate, to compensate for the cost of debt. Therefore, the central bank’s rate cut, regardless of no effect, if any, estimates that only part of the larger, bargaining capability of the enterprise can yield, small businesses benefit should be limited.
In addition, the China iron and steel association, November 25 in the afternoon, according to statistics released by mid-november, 1.6421 million tons of crude steel production enterprises, ten-day month-on-month increase 0.44%; Key enterprises inventory of 14.4593 million tons, increase from early 461300 tons, a 3.30% increase. And late in the previous 10 months, and in early November, crude steel nissan and steel inventories for the APEC meeting and the corresponding requirements of environmental protection has always been at the decline stage.
Production and inventory increased, with the demand of weather, pressure of supply and demand of hong kong-listed short-term hard to improve.
Tangshan, the head of a private steel mills was modern logistics newspaper reporter said, now also depends on which direction the hong kong-listed demand, not demand “policy,” it is difficult to drive the hong kong-listed alone out of the woods. It seems to the head of the short-term hong kong-listed substantial reversal is hard to occur. Despite lower interest rates for hong kong-listed stimulus in the short term is not big, but for the infrastructure associated with steel and real estate industry has had a huge impact. Once these projects continue to start, the steel industry will demand in a new window.
But not everyone is so sanguine. The reporter discovers in the process of survey, some people for the rate cut is not very positive. “The central bank to cut interest rates indicates the loose monetary policy could come, but to cut interest rates for the real estate industry helps to inventory, but it’s hard to boost utilization. Policy agitation does not change the fate of the black iron and steel industry.” Tangshan, said a trader.