Steel industry development situation is still grim in China

Recently, the China iron and steel association conference information in the third time this year, the steel industry main business loss, loss has amounted to 21.68 billion yuan. The report also pointed out that crude steel output fell for the first time since the nearly 20 years. Although crude steel output fell, but the steel supply contradictions are still outstanding, steel prices continued to fall, and iron ore prices have more than two months of upward rebound, iron and steel enterprise main business loss is serious, the situation facing the steel industry is still very grim.

At present, steel prices continue to hit a new low. Since this year the steel price index fell more than last year drop. Steel price index continues to break through index record lows, is now below 63 points, while the index at the beginning of last year reward 99 points. In the first half of the whole, large and medium-sized iron and steel enterprise sales income 1.5 trillion yuan, down 17.9% year-on-year. Despite the total profit of 1.64 billion yuan, main business losses of 21.68 billion yuan, ZengKui 16.768 billion yuan; Number loss ratio reached 42.6%, the loss of enterprise production accounted for 36.8%.

“At present, the excess iron and steel industry in the development, the steel product prices have new lows after nearly 15 years, under the condition of the prices have been falling, the steel industry profit margin of only 0.9% last year, and, according to the data in the first quarter of this year, steel industry profits relapse, steel industry profits fell 45.2% year on year for the first two months of this year”. Analysts in accept the China sankei shimbun reporters interview.

Analysts also pointed out that the current real estate industry is in a downturn, demand for steel is insufficient, at the same time, the construction industry in the steel downstream demand accounted for only 15%, infrastructure investment demand for steel is very limited. Steel prices all the way down, but the actual demand downturn, leading to steel mills of loss.

In addition, on the surface of the subject to capital pressure, steel mills active maintenance, inadequate to leak. High steel production, weak market demand, makes some steel mills inventory pressure rise, and as prices fall, daily high inventories facing severe losses cost again.

Another analyst in an interview with the China sankei shimbun reporters pointed out that excess capacity and steel price lower problem is always the focus in the industry. Traditional steel industry demand for steel continues to decline, and a long period of low prices and restricted the transformation and upgrading of the steel industry and the innovation and development. In addition, the enterprise itself the problem such as financing difficulties, financing expensive also prominent, steel exports grew sharply increasing trade friction.

The domestic market downturn spurred steel exports increased significantly. In the first half of the national steel exports of 52.4 million tons, up 27.8%; Imported steel 6.65 million tons, down 8.2% year-on-year. In the first half of the total net exports amount to 47.66 million tons of crude steel, steel year-on-year increase of 12.79 million tons. Despite obvious growth in steel exports during the first half, but the average price steel exports fell by $172 / ton, exports increased by only 0.06%. China steel industry association executive vice President of Mr Zhu pointed out that low-cost export strategy directly lead to increase in the number of trade friction on China’s iron and steel products. 1 – July, in view of China’s iron and steel products of new trade remedy investigation has 13.