Excess capacity of the hottest steel still needs t

2022-08-11
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Excess capacity of steel is still filled with polyurethane materials, which needs to be resolved. How to transform in 2017

it is reported that in the first quarter of this year, the national economy had a good start, stimulating the market demand of the steel industry. At the end of June, a thorough inventory of the effective implementation of policies such as "ground bar steel" made the steel industry obtain a good external environment

the iron and steel industry seized the favorable opportunity, took multiple measures to reduce costs and went all out to increase benefits, which also achieved a good start

basic operation of the steel industry in the first quarter

crude steel output increased by 4.6% year-on-year. In June, the national iron, steel and timber output was 175.64 million tons, 201.1 million tons and 262.95 million tons respectively, with a year-on-year increase of 4.1%, 4.6% and 2.1% respectively. The average daily output of crude steel in June was 2.2344 million tons, equivalent to the annual output of 816 million tons of crude steel, slightly higher than the annual output of crude steel last year. Especially in March, the daily output reached 2322500 tons, a record high. Crude steel production increased significantly in January, on the one hand, due to the rapid release of production capacity, on the other hand, due to the low base of the previous year

steel exports fell sharply. In February, China exported 20.73 million tons of steel, a year-on-year decrease of 25%, of which 5.75 million tons were exported in February, the lowest level of exports in a single month since February 2014. Since August 2016, the export volume of steel in a single month has decreased year-on-year for 8 consecutive months; In January, 3.48 million tons of steel were imported, an increase of 11.3% year-on-year

investment in the steel industry fell sharply. In June, the national urban fixed asset investment increased by 9.2% year-on-year, but in the same period, the investment in ferrous metal smelting and rolling processing industry completed 58.4 billion yuan, a year-on-year decrease of 10.1%, an increase of 7 percentage points over the same period last year. The investment in ferrous metal mining and beneficiation industry was 10.1 billion yuan, a year-on-year decrease of 23.1%, an increase of 5 percentage points over the same period last year

steel inventory is still at a high level. In March, the social inventory of five major varieties of steel in 20 cities was 11.69 million tons, down 360000 tons from February, but increased by 2.23 million tons year-on-year. In March, hot-rolled and cold-rolled coils in the inventory of five major varieties increased month on month, while rebar, wire rod and medium and heavy plate decreased month on month. At the end of March, the steel inventory of member enterprises was 14.4334 million tons, an increase of 410800 tons over the end of February and 1.6708 million tons over the end of the previous year

iron ore inventory hit a record high. In January, China imported 270.88 million tons of iron ore, an increase of 29.5 million tons year-on-year, an increase of 12.2%; The average import price was 79.1 US dollars/ton, an increase of 70.5% year-on-year. At the end of March, the port inventory of iron ore reached 134.56 million tons, an increase of 35.13 million tons year-on-year, a record high. As of April 14, the iron ore port inventory was 132.36 million tons, continuing to maintain a record high. China's dependence on foreign iron ore was 86.6% in June

steel prices rose and fell. On March 3, the CSPI steel price index reached a high of 107.88 points since 2013, and then fell all the way. It fell to 101.81 points at the end of March and 92.23 points on April 21, 14.5% lower than the high on March 3; Since late March, the price index of almost all varieties has declined, and the decline of the price index of plates is higher than that of long wood

industrial efficiency continues to improve. In January, member steel enterprises achieved a total sales revenue of 839.326 billion yuan, an increase of 40.16% year-on-year; The total profit achieved by offsetting profit and loss was 23.284 billion yuan, compared with a loss of 8.748 billion yuan in the same period last year; The sales profit margin of member enterprises was 2.77%, but the profit margin of the main business income of Industrial Enterprises above Designated Size nationwide was 5.92% in January, and the profitability of the steel industry was still very low. In June, the number of loss making enterprises decreased by 17 year-on-year, and 19% of enterprises still suffered losses

problems needing attention in the operation of the steel industry

generally speaking, the steel industry has a good start and basically runs smoothly, but there are also some problems that deserve the attention of the whole industry

first, steel exports continued to decline significantly. The sharp decline in exports is not only related to international trade protection, but also related to the improvement of domestic prices and the weakening of export momentum of steel enterprises. At present, the problem in export should be to maintain an appropriate amount of steel exports, form a stable international market share, and avoid the ups and downs of steel exports. At the same time, maintaining an appropriate amount of steel exports will help China's steel industry compete fairly with similar foreign products on a broader platform, help Chinese steel enterprises continue to improve product quality and service quality, help to form a stable supply and demand cooperation relationship with foreign users, and then promote the competitiveness of Chinese steel enterprises

second, steel prices fluctuate greatly. This round of steel price rise at the beginning of this year is mainly a continuation of the expectations brought by the removal of production capacity, especially the removal of "ground steel". CISA has indicated in February this year that the elimination of "ground bar steel" will not bring about a shortage of long products, especially rebar, and although the production capacity of "ground bar steel" is very high, the actual output is not so much. At present, the total market demand has not changed much, while the increase in output and the decline in exports will increase the supply in the domestic market, which will inevitably curb the rise in steel prices. However, the general tone of this year is to make progress while maintaining stability, the work of reducing production capacity is still on the way, infrastructure investment has maintained growth, and the law enforcement of environmental protection has been continuously strengthened. Therefore, the steel market should not have a cliff like fall in steel prices. The rise and fall of steel prices still depends on the relationship between supply and demand. Whether steel prices can fluctuate within a reasonable range requires joint maintenance. It is hoped that large enterprises and regional backbone enterprises will have a firm determination in price, adhere to organizing production according to orders, and do not produce without orders

third, the operation situation in the first quarter cannot represent the operation situation of the whole year. Whether the annual crude steel output and consumption increase or decrease remains to be seen. Due to the relatively good price of steel some time ago, the enterprise has a high enthusiasm for production and has a strong momentum of increasing production. At this time, it is more necessary to deal with the relationship between capacity reduction and output control. De capacity does not mean de production, nor can it be basically equivalent to social demand. Output basically changes with demand. The capacity utilization rate should also have a reasonable range. When the capacity utilization rate is relatively low, it is very important to control the output well. Expanding production does not mean that there is profit. The whole industry has experienced the pain of 2015. Therefore, iron and steel enterprises must overcome short-sighted behavior and not blindly expand production; We should be soberly aware that the foundation for the recovery of benefits in the iron and steel industry is not solid, and we should not mistakenly believe that the market situation of the industry has undergone fundamental changes and relax our efforts

fourth, the leverage ratio of enterprises is still high, and the problems of difficult and expensive financing are still prominent. The steel industry is a heavy asset industry. Through various efforts, the asset liability ratio of member enterprises has decreased, but by the end of March, the asset liability ratio is still as high as 6, which will make the 3D printing structure without reprocessing ability of 9.97%. And affected by the strict control of the loan scale of steel enterprises, many steel enterprises are facing difficulties in renewing loans and withdrawing loans, and the problems of difficult and expensive financing have not been effectively alleviated. In 2016, the financial expenses of member enterprises reached 89.1 billion yuan, and the financial expenses in the first quarter of this year reached 22 billion yuan

key work in 2017

2017 is the year of deepening the supply side structural reform, the year of tackling the "de capacity" work in the steel industry, and the first year of "de leveraging" work. The CPC Central Committee and the State Council regard the iron and steel industry as the forerunner to promote the supply side structural reform, and take resolving the excess capacity as the breakthrough, which brings a rare historical opportunity for the iron and steel industry to extricate itself from difficulties and develop, transform and upgrade. In order to thoroughly implement the spirit of the CPC Central Committee and the State Council on taking the supply side structural reform as the main line, seize the opportunity and promote the transformation and upgrading of the steel industry, the steel industry should do a number of top priorities in 2017:

first, we should unswervingly resolve the excess capacity of steel

in 2016, steel overcapacity reduction achieved good results. First, through the practice of resolving steel overcapacity, the understanding of supply side structural reform has been generally improved. A series of measures that "three deletions, one reduction and one supplement" graphene can be used in many advanced materials and devices will have great practical significance and long-term impact on the steel industry; Second, the market has been purified, and the transformation and upgrading of enterprises have a good external environment; Third, the industry turned losses into profits, enhancing confidence. 2017 is a crucial year to reduce production capacity. We must go all out to fight this battle. The association and member enterprises will continue to cooperate with the government to carry out relevant work: first, take the disposal of steel zombie enterprises as the bull's nose, and the zombie enterprises that should be eliminated will be resolutely eliminated; Second, we will resolutely ban "ground steel bars" and eliminate backward production capacity; Third, resolutely crack down on illegal projects and strictly prevent new production capacity; Fourth, accelerate the joint reorganization and improve the industry concentration; Fifthly, we should settle the personnel and properly handle the debt problem

second, we should fully promote the deleveraging of the steel industry into the fast lane

the central economic work conference at the end of last year and the government work report this year have made deleveraging of enterprises a top priority. As far as steel is concerned, overcapacity will affect the transformation and upgrading of the steel industry, and high leverage will also cause the lag of the transformation and upgrading of the steel industry. In the past, we have always said that the labor productivity of the iron and steel industry is low, especially in the old state-owned enterprises, where many people are the biggest burden. Now this pattern has not been fundamentally solved, and new situations and problems such as the heavy debt burden are constantly emerging, such as the phenomenon of short-term loans and long-term use is very serious. Whether it is the relocation of enterprises, or the expansion of production scale, the adjustment of product structure, and the increase of non steel investment, it is mostly achieved by borrowing. When the steel production capacity is seriously excess and the market situation is bad, the excessive debt often makes the enterprises breathless and difficult, and some enterprises even have the trend of continuously increasing the debt burden

at present, it is an indisputable fact that some backbone enterprises have high asset liability ratio and heavy financial burden. However, these enterprises also have their own competitive advantages, such as advantages in products, regions, talents and so on. Once such backbone enterprises can deleverage and reduce the debt burden, they can radiate the vitality of enterprises. Therefore, it is suggested that the financial system should have pressure on steel enterprises

in terms of deleveraging, the inter ministerial Joint Committee, especially the CBRC, has done a lot of work, and there have been cases like the debt disposal of Sinosteel group, but on the whole, there is still a gap. The urgency of enterprise deleveraging is high, and the specific operation is full of difficulties. Some enterprises have implemented debt to equity swap. It is reported that it can only be regarded as "famous shares and real debt". The asset liability ratio has come down, but the actual burden has increased. This is not what we hope. On March 9, the China Steel Association and the China Banking Regulatory Commission held the first deleveraging meeting of the iron and steel industry in Nanchang, and proposed the goal of reducing the industry's asset liability ratio to less than 60% in a year's time. It is hoped that with the support of the China Banking Regulatory Commission and other government departments, a number of deleveraging leading enterprises will be identified as soon as possible, and through a series of effective measures, the asset liability ratio and enterprise debt burden will be reduced, and the assets and debts in the deleveraging will be disposed of well

third, do everything possible to stabilize the operation of the industry and take multiple measures to increase benefits

in terms of promoting the stable operation of the industry, the association held a symposium on long material enterprises on February 20 and a symposium on futures, steel stations and e-commerce in Shanghai on March 2 to jointly analyze the market and study measures, with good results. The stable operation of the steel market requires a good market environment and a fair competition order. At the same time, the industry and enterprises also need to make efforts in the following aspects: first, reduce production capacity and create for enterprises

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