Steel industry may profit next year

“Iron and steel enterprises differentiation is intensifying, only change ideas, deepen the internal reform, actively respond to changing market conditions, to realize sustainable development in the evolution of market competition.” The China iron and steel association, vice President and secretary general Mr Zhang pointed out recently, accompanied by the reform, the dividends of the strengthening of internal management and the original fuel prices are low, represented by iron ore industry profits next year will be slightly change on the basis of this year, but industry overall benefit will remain relatively weak state.

Mr Zhang pointed out that the steel demand growth slowing, excess capacity, industry concentration degree is low, the influence of multiple factors such as the original fuel prices, steel prices continue to shock the downside in recent years. , since the beginning of the months of steel price index below 100 points. ~ 1 month in October, thanks to the decline of the original fuel prices this year is greater than the steel prices decline, steel association member enterprises an average return on sales of 0.75%, although slightly more than 0.61% last year, but it is still in the industry at the bottom.

Look from the industry overall quality of internal management, the problem is still more serious. First 10 months of this year, China’s crude steel production increased 2.07%, but sales fell 1.03% year on year, funds of finished goods rose 5.12% from a year, financial costs rose 20.68%, year-on-year growth of 9.98% of net accounts receivable.

“Notable is, a group of companies relying on technical innovation and a series of internal management reform, actively respond to the change of market environment, and achieved good results.” Mr Zhang said, “at the same time, also have a batch of enterprises facing great difficulties, such as some enterprise capital chain rupture, some production, some even entered bankruptcy reorganization procedures.”

, according to Mr Zhang steel association member enterprise, the profits of the top 20, 2013 iron and steel enterprises combined profits accounted for 65.66% of the total amount of all for-profit companies, 10 months now years ago this proportion to rise further, to 78.97%. This set of data show that the differentiation of iron and steel enterprise is growing.

“The new normal for iron and steel industry, as well as new challenges, there are new opportunities.” Mr Zhang pointed out that “the iron and steel industry have great development space and market, so be confident.”

Under the new normal, represented by manufacturing and construction of the downstream steel industry upgrading, will boost steel performance and quality improvement. In shipbuilding plate, for example, high strength ship plate in the shipbuilding plate demand last year accounted for less than 10%, and this year high strength ship plate has accounted for more than 50%. In addition, the advancement of infrastructure construction of water conservancy, railways, bohai sea region coordinated development, the Yangtze river economic belt, the advance of “all the way along the” three big strategy and the border area development planning (2014 ~ 2020), “the implementation of signal such as iron and steel industry development prospect and space is considerable.

Mr Zhang thinks that the total demand for steel products in 2015 will continue to maintain the basic stability, volatility will not exceed 3%, and present a stable quantity, quality rise development momentum. Dissolve excess capacity guidance rolled out a series of detailed rules for the implementation of form a complete set, to create a fair market competition environment for taxation, financial reform, the revision of the iron and steel industry policy, the new journal of environmental law and environmental standards strict implementation of the policy to control sections steel production release or eliminate the effect of capacity will gradually revealed, and the reversed transmission steel industry structure adjustment and transformation and upgrading. Differentiation in this background, the iron and steel enterprises will last, some enterprises face, the dominant resources allocation role of the market will gradually appear.

Mr Zhang pointed out that both manufacturing enterprises, and trade enterprises, to seize two things: one is to put more emphasis on refinement of management, accurate decisions, make full use of information and social resources, improve the success rate of decision making. Second, must pay attention to the transformation and upgrade. “In the market environment, transformation to firmly grasp the basis of good faith, especially in countries to the rule of law, enterprises should take the good faith for this.” Mr Zhang stressed.