The hottest steel industry faces a new test in con

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Recently, the "2019 (10th) China Iron and Steel Development Forum" and the 2019 annual meeting of the all China Metallurgical chamber of commerce were held one after another. Many people in the iron and steel industry talked about the current problems and future development trends of the iron and steel industry under the new situation of achieving the goal of iron and steel de capacity

many people believe that although the result of capacity removal is remarkable, the problems of capacity expansion, capacity replacement and "resurgence" of ground bar steel occur frequently. With the continuous release of subsequent compliant capacity and the continuous improvement of capacity utilization, the existing fragile balance between supply and demand may be broken again. At the same time, because the pressure of downstream industries will sooner or later react on the steel industry, it is difficult for the steel industry to maintain high-speed development for a long time. Therefore, it is expected that after experiencing the best period in the history of the industry in 2018, the steel industry may show a shock downward trend in 2019

the benefits of the steel industry hit a new high

since 2016, the steel industry has reduced crude steel production capacity by more than 150 million tons, exceeding the upper limit target set by the 13th five year plan two years in advance. A total of more than 700 steel strip enterprises have been banned, with a production capacity of 140 million tons. The utilization rate of crude steel capacity has increased from 70% in 2015 to more than 80%, which has basically entered a reasonable range

"the production and operation of the steel industry has improved significantly, the steel price has returned to a reasonable range as a whole, and the profit has reached the best level." Wen Gang, deputy director of the raw materials department of the Ministry of industry and information technology, said at the 2019 annual meeting of the all China Metallurgical chamber of commerce that the production of pig iron, steel and steel in the whole industry in 2018 was 771 million tons, 928 million tons and 1.106 billion tons, with year-on-year increases of 3.0%, 6.6% and 8.5% respectively. The comprehensive price index is at a historical high, with an annual average of 115.8 points, an increase of 7.6% year-on-year. Compared with the standard price index of CISA in April 1994, it increased by 15.8%, and significantly increased by 72.6% compared with 2015 before "de capacity"

since the "de capacity", the profit of the steel industry has continuously hit a record high. Data show that the main revenue of China's steel industry in 2018 was 7.65 trillion yuan, an increase of 13.8%. The profit realized was 470.4 billion yuan, with a year-on-year increase of 39.3%. Compared with 2015, the profit increased by nearly 555.1 billion yuan. In terms of industry debt ratio, the asset liability ratio of key large and medium-sized enterprises in the steel industry was 65%, down 2.6% year-on-year, 6 percentage points lower than that in 2015

taking private steel enterprises as an example, the data of all China Metallurgical chamber of Commerce shows that the steel output of private steel enterprises is 547 million tons, an increase of 8.1% year-on-year, and the proportion of steel output in the country has increased from 56.53% in 2017 to 58.96%. Pig iron output was 420 million tons, with a year-on-year increase of 3.47%. The steel output was 739 million tons, with a year-on-year increase of 6.97%. We are constantly "bumping" to adjust the profit of 468 yuan per ton of steel, and the profit margin of sales revenue is 7.8%, higher than the industry average. The asset liability ratio decreased from 68.9% in 2015 to 62.93% in 2018

the impulse to expand production is obvious, and it is more difficult to consolidate the achievements.

Zhang Zhixiang, President of the all China Metallurgical chamber of Commerce, said that China's iron and steel industry has shifted from quantitative development to high-quality development. Its main feature is that the output has changed from the shortage of supply quantity to the structural contradiction of varieties, and the demand for steel products has entered a saturation period

Zhang Zhixiang believes that it is a high probability event that the steel production in 2019 exceeds the level in 2018, which also means that the possibility of transforming from basic balance to oversupply is greatly increased

"driven by high profits, some regions and enterprises are very willing to invest in the steel industry, with obvious impulse to expand production capacity, and illegal construction problems occur from time to time." Lu Guixin, inspector of the raw material industry department of the Ministry of industry and information technology, made the above statement at the China Iron and Steel Development Forum

Lu Guixin pointed out that with the continuous release of subsequent compliant capacity and the continuous improvement of capacity utilization, the existing fragile balance between supply and demand may be broken again. In 2018, China's crude steel output reached 928 million tons, a record high. Banning new production capacity has become the key to consolidating the achievements of the supply side structural reform of the steel industry

Zhang Zhixiang also said that it should be paid attention to that under the condition of the dynamic balance of supply and demand, due to the improvement of technical equipment and process level, the production capacity will be increased, coupled with the release of new capacity, if the industry is lack of self-discipline, excess output will appear at any time

"our output growth is a little too fast." Li Xinchuang, President of the metallurgical Planning Institute, said that from January to February, the added value of the steel industry increased by 7.5% year-on-year, pig iron, crude steel and steel increased by 9.8%, 9.2% and 10.7% year-on-year respectively, and the sales revenue increased by 6% year-on-year. However, it should be noted that compared with the high growth in China, the growth rate of global crude steel production is only 3.9%

on the one hand, the steel output increased rapidly, on the other hand, the ore price of raw materials increased. Li Xinchuang said that the low price of steel and the high ore price have led to a sharp decline in the benefits of steel enterprises this year. In the first two months, the efficiency of the steel plant fell by 38%, the sales profit margin fell from an average of 6.9% last year to 3.5% now, and the loss of enterprises increased by 10 percentage points, with nearly a quarter of enterprises losing money

"the steel industry will not develop at a high speed for a long time." Wen Gang said that sooner or later, the pressure of downstream industries will react on the steel industry

be alert to simple relocation and blindly seek to expand

insiders admitted that the relocation of some urban steel mills has a great impact, and the separation of steel coke production is serious, increasing the difficulty of environmental governance and the burden of enterprises. "There are 38 urban steel mills, accounting for nearly 40% of the national production capacity, and more than 20 have been asked to relocate. Some places require steel enterprises to relocate, but they just move a nest, only a dozen kilometers away."

in this regard, Lu Guixin said that simplified relocation is difficult to solve structural problems. At present, there are problems of excessive concentration of steel production capacity in Beijing Tianjin Hebei and its surrounding areas, the Yangtze River Delta and other places, and the heavy proportion of long process projects of blast furnace and converter. Taking the Beijing Tianjin Hebei region as an example, it takes 2.2% of the national land area to carry 25% of the country's crude steel output, and the long process of blast furnace and converter accounts for as much as 98%. It will be held on July 13 (1) 5, 2016 in Zhuzhou Midea Marriott Hotel next to Hunan University of technology. The problem of large pollution emissions and total energy consumption per unit area is very prominent. In addition, local governments tend to simplify the relocation of steel enterprises in the province, even in cities and counties. It is difficult to fundamentally solve the contradiction between the total steel production capacity and regional environmental capacity

"the relocation of urban steel mills has become an upsurge, and the construction of large coastal steel bases is popular." Lu Guixin said that the coastal layout of China's steel industry has been basically completed. "But Hebei, Shandong, Jiangsu and other places are still planning the coastal layout."

at the same time, Lu Guixin pointed out that at present, some provinces with relatively insufficient steel production capacity, such as South China and southwest China, compete to attract production capacity, blindly seek to expand, and ignore their own factor endowment, which is very likely to cause a new round of steel "siege" in the future

he suggested that local governments should properly handle the relationship between industrial development and environmental protection from the perspective of industry reality and enterprise interests. For major steel projects, we should widely solicit opinions, fully demonstrate, make prudent decisions, and advance steadily. For qualified urban steel mills, priority should be given to local transformation. For resources, energy and other factors, especially in areas where the circulation of goods is frequently insufficient, enterprises should be encouraged to transform, shut down, withdraw, or transfer abroad

"the industrial layout should have long-term planning and goals." Zhang Zhixiang said that, for example, by following the energy consumption index, enterprises with high steel production density are encouraged to go out and regulate the capacity layout of the steel industry. In terms of customers, competitors, etc

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