China Steel Association said that steel sales per ton of profit is only 4.2 yuan

“In recent years, the price of steel has been low. The average steel price this year is even lower than that of 1994, which is 340 yuan lower than last year’s ton, a drop of 8.9%.”

Zhang Changfu, vice president and secretary general of China Iron and Steel Association, gave this series of pessimistic data at the 2014 China Steel Market Outlook and “My Steel” annual meeting held yesterday. He also revealed that this year ago In 11 months, the profits of China's steel enterprises totaled 16.18 billion yuan, the industry's sales profit margin was only 0.48%, and the average profit per ton of steel was only 28 yuan.

“If you look at the main business alone, the total profit of the steel mill is only 5.8 billion yuan, which is equivalent to only 4.2 yuan per ton of steel.” Zhang Changfu said that the current steel enterprises are “high-yield, high-cost, low-price, low- Benefits, the days are sad.

According to the latest statistics of China Steel Association, China's crude steel output is expected to reach 782 million tons in 2013. Zhang Changfu expects that next year's crude steel output will maintain a growth rate of 2% to 3%, reaching 800 million tons. It also means that all aspects of the relevant industrial chain, such as steel producers and traders, still have to prepare for the long-term hardships and tight days.

In recent years, the government has been trying to alleviate overcapacity in the steel industry by eliminating backward production capacity. However, Zhang Changfu pointed out that the difficulties and bottlenecks encountered in the development of the steel industry are the contradictions accumulated in the rapid development of the past 30 years. Years or 5 years of regulation can be effective, "depending on capacity release, capacity increase to dilute costs, earning benefits to lead the opponent's thinking can not be effective, steel companies must overcome traditional habits, change the way of development, explore stable production and efficiency Even cutting production and increasing efficiency, and shifting from a simple producer to a service provider."

For the overcapacity problem in the steel industry, Miao Changxing, deputy director of the Industrial Policy Department of the Ministry of Industry and Information Technology, revealed at the meeting yesterday that the next step will be to increase the energy consumption and pollutant discharge standards, strictly enforce special emission limits, and apply differential electricity prices and penalties. Different price policies such as electricity price and water price will increase law enforcement penalties to speed up the elimination of a batch of backward production capacity. “Environmental emission standards will be an important basis for eliminating backward production capacity during the “13th Five-Year Plan” period. The government is working hard to formulate new and more stringent environmental standards, and also supports steel companies to adopt aid construction, joint venture cooperation, and construction of overseas processing and distribution centers. The mode of transfer to overseas, after all, the market space for the development of the steel industry in Southeast Asia, Africa and other places is still very large."

While the pressure on steel production capacity cannot be alleviated, the pressure from upstream raw materials is still not small. At yesterday's meeting, Zhang Lei, vice president of China Metals and Mining at Morgan Stanley, predicted that the supply of iron ore in the first half of next year will still be in short supply. In the first quarter, iron ore prices will remain stable and strong.

Zhang Lei pointed out that since the beginning of this year, the ore inventory level of steel mills has been at a low level. Therefore, the iron ore spot price index in 2013 was much more stable than the roller coaster price change in the second half of 2012. However, the average price of iron ore in the first three quarters of 2013 was $136/ton, still exceeding the expectations of the most optimistic analysts at the time.

For 2014, Zhang Lei believes that although the supply of iron ore will increase, the supply of iron ore will remain tight in the first half of 2014. On the demand side, the demand of China's steel industry is expected to increase by 3.1% to 779 million tons in 2014. . Accordingly, the price of iron ore in the first quarter of 2014 will increase to around $130/ton.

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