The steel industry is still in the "cold winter"

Abstract "This year the steel industry is still in the 'cold winter'. In terms of the macro situation, 2013 will be slightly better than 2012, but the steel industry is difficult to synchronize with the macroeconomic situation. Even in 2013, even GDP growth of 8%...
“This year the steel industry is still in the 'cold winter'. In terms of the macro situation, 2013 will be slightly better than 2012, but the steel industry is difficult to synchronize with the macroeconomic situation. Even if GDP grows above 8% in 2013, steel production growth is estimated. It is also around 3%. The industry benefits will remain in a low profit state."

On March 2nd, Shen Wenrong, president of the All-China Small and Medium Metallurgical Enterprise Chamber of Commerce and Chairman of the Board of Directors of Jiangsu Shagang Group Co., Ltd. made the above remarks at the opening ceremony of the All-China Small and Medium Metallurgical Enterprise Chamber of Commerce.

According to analysis by Shen Wenrong, the steel industry has its particularity, which is manifested in the following three aspects:

First, due to the slow recovery of the world economy and the recession of the Eurozone, the export situation is difficult to improve. The country will mainly rely on consumption to drive GDP in the future, and consumption will have less impact on steel consumption intensity.

Second, there is no obvious sign of improvement in investment, real estate continues to regulate and control, urbanization construction can only be steadily advanced. The investment in railway, subway and highway construction is basically the same as last year. Shipbuilding and major equipment manufacturing are still in a downturn, and demand for steel products is not There will be a big boost.

Third, China has moved from a high-speed growth period to a medium- and low-speed growth period. This objective law cannot be broken, and China's economic development will shift from a heavy speed to a heavy quality. With the improvement of the quality of development, the intensity of steel consumption will gradually weaken. In fact, since 2011, the steel consumption intensity per 100 million yuan of GDP has been reduced from the previous 1657 tons to 1370 tons. In view of this, China's steel output will be close to the peak in the next few years, and there is no possibility of a substantial increase in quantity.

2012 was the “cold winter” of the steel industry. The whole industry produced 718 million tons of steel, an increase of 3.1%, which is the least growth year in recent years.

As far as 2013 is concerned, Shen Wenrong said that steel companies still face high cost pressures on iron ore. Affected by monopoly, subject to the current small sample index platform, due to the manipulation of some iron ore traders and several major foreign mining companies, the sharp fluctuations in iron ore prices will become the norm, and the price of iron ore will not be significantly reduced, even The decline is also a phased fluctuation that is manipulated, which is bound to cause the production costs of steel companies to be difficult to control.

At the same time, as demand continues to shrink, excess capacity will not be digested in the short term, and steel prices will not increase significantly. The efficiency of steel companies is getting smaller and smaller, even approaching the cliff.

In addition, in the internal mechanism, the market mechanism has not yet fully played its role. Some steel companies have not adjusted the production rhythm in time according to market demand and changes in profit and loss, which has a negative impact on steel prices. In terms of enterprise management, many steel companies still stay in high-growth, high-cost, high-profit, high-intensity production organizations and modes of thinking. The management model has not changed, and management benefits cannot be exerted.

To this end, Shen Wenrong suggested that the transformation of development mode should truly become the conscious behavior of iron and steel enterprises; continue to increase energy conservation and environmental protection efforts, increase investment, improve support, ensure compliance, and obtain access permits; further reduce costs and ensure efficiency; Strive to improve management.

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