The hottest industrial chain is fragile, and the o

  • Detail

The industrial chain is fragile, and the operation situation of the steel industry should not be optimistic.

observation on China's industrial operation in 2009 Steel article

"since this year, the overall operation of the national steel industry has been at a low ebb under the multiple pressures of increasing production capacity month by month, the downturn in the domestic market, the sharp decline in exports, and the failure of iron ore negotiations. At the same time, steel production has increased more than expected, but the vulnerability of the industrial chain has also been highlighted. The product structure, organizational structure and regional layout of the steel industry are still prominent. The operating performance of large enterprises lags behind that of small and medium-sized enterprises." The senior personage of China United Steel commented on the operation of the steel industry in the first half of the year

According to the analysis of insiders, the domestic steel market price has increased since the end of April, which is closely related to a series of macro policies issued by the state to stimulate domestic demand and ensure stable and rapid economic development. With the gradual implementation of the investment scale of 4trillion yuan, a number of infrastructure construction projects have been started around the country, driving the demand for construction steel. The economic operation from May to June showed that a number of indicators rose steadily

however, judging from the current economic situation at home and abroad and the situation of the steel market, the economy of developed countries is still in recession, and the foundation for China's economic stabilization and improvement is not solid. Despite the positive changes in the steel market, it still faces many uncertain and unstable factors. Therefore, we must not place our hopes on the fundamental improvement of the market in the short term. Because the important factor affecting market changes is the relationship between supply and demand. "The contradiction of excess steel production capacity in China has not been eliminated. When the market is good, steel production capacity will be released quickly, which will lead to the decline of steel prices and the rise of upstream raw material prices. Therefore, we must be prepared for a tough and protracted war." Industry experts pointed out

as demand recovers and inflation expectations become increasingly strong, it is expected that iron ore prices will rise and cost pressures on steel enterprises will increase. At the end of June, the steel composite price index rose 3.91% month on month, but the price of imported spot ore rose 10.53% month on month in the same period. With the gradual recovery of demand, the possibility of further increase in spot iron ore prices in the fourth quarter cannot be ruled out. The recovery of the global economy and the rise of iron ore prices will also drive the Baltic dry bulk composite freight index (BDI index) to rise. In the second half of the year, the cost pressure of Chinese steel enterprises will increase significantly

exports are not optimistic

some analysts pointed out that the structural contradiction between "U.S. consumption and China's exports" cannot be solved in 3-5 years, and the world economic growth in the next 2-3 years is basically impossible to return to the high growth period of more than 4.5% from 2004 to 2007. China's export situation is not optimistic. "In the second half of 2009, China's direct and indirect steel exports will still be significantly negative growth, and it will be difficult to reach the export level of 2007-08 in the next 2-3 years."

it is still not optimistic about the export of steel products in the second half of this year and next year. First, in the first half of the year, the world's cumulative crude steel output was 549.262 million tons, a decrease of 21.3% compared with the same period last year; Excluding China's output, the global crude steel output has decreased by 35%, indicating that the global steel demand is still sluggish. Secondly, the strength of the RMB exchange rate also restricts exports to a certain extent

the analysis points out that China's economy is doing well quarter by quarter, but it mainly depends on infrastructure investment. Consumption and social investment are difficult to effectively boost in the short term. The growth of steel consumption is still dominated by construction steel. Stimulated by a package of policies such as "four trillion yuan investment", China's economy has shown signs of recovery and is in a critical period of stabilization and recovery. However, economic growth mainly depends on the high-speed growth of investment, especially the government led infrastructure investment. In the growth composition of consumer price (GDP), investment has driven 6.2 percentage points. This growth is not sustainable. The sustained and stable recovery of the economy also depends on the endogenous growth power of the market itself, especially the effective start of social investment and the stable growth of household consumption

industry experts pointed out that in the second half of 2009, the main driving force of economic growth will still be government led infrastructure investment. The reason is that under the background of oversupply to avoid dust entering the interior, it is impossible for social investment to increase investment when the production capacity does not play to the normal level, and the growth momentum of private investment is still insufficient; Exports continued to be depressed; High employment pressure, slow growth of enterprise profits and residents' income, and difficulties in improving the social security system in the short term all restrict consumption growth. Without further consumption stimulus policies, consumption growth may decline in the second half of the year

from the perspective of the steel industry, it is estimated that the annual apparent consumption may exceed 500 million tons, but the growth structure is still dominated by construction steel. Considering inflation expectations, the government led infrastructure investment may weaken, the apparent consumption of crude steel in the second half of the year will be lower than that in the first half, and the problem of overcapacity will remain very prominent

the benefits of steel enterprises may improve

with the implementation of a number of national measures and the gradual effect, the benefits of the steel industry are expected to improve. In May, 72 large and medium-sized member enterprises of CISA achieved a profit of 1.262 billion yuan, which is the first profit since the loss of the whole industry in October last year. However, from the current situation prediction, it is difficult for the efficiency level of the steel industry to reach the level of the first half of 2008 by 2010

as of July 21, among the 26 steel industry companies that disclosed the interim performance of 2009, 12 companies still expected the interim performance to decline, and 14 companies expected the interim performance to suffer losses. The total estimated net profit of 26 companies in the medium term of this year is -86 intelligent and flexible 3.5 billion yuan (based on the disclosed minimum profit, the actual profit level should be higher than the estimated value), compared with the net profit of 35.178 billion yuan in the same period of 2008, a significant decrease of 124.5%

According to the analysis, judging from the current situation, as long as the national macro policy and macro situation continue to improve, the momentum of steel price rise is expected to remain until the end of the third quarter. It should be noted that, first, from the situation of Tangshan area, due to the obvious increase in domestic demand since the second quarter, the steel mills that can be opened now have basically resumed production, and excess capacity may erupt at any time; Second, the good response is that the raw fuel price has laid the foundation for Zhongwang to enter the field of aircraft manufacturing; The rise of Georgia in 2015 is almost inevitable. Therefore, we should not be too optimistic about the operation situation of the steel industry this year and next

Copyright © 2011 JIN SHI