Liu Zhengjiang, Secretary of the Party Committee and Secretary-General of the China Iron and Steel Association Photo source: Daily Economic reporter Peng Fei
Owing to overcapacity, the steel industry once fell into the abyss, but since the turn of 2016, the industry's productivity in 2018 has improved completely and has achieved almost 10 years of success, it seems to be a fact.
"The performance of the Chinese steel industry in 2018 is the best year in the 10 years of the financial crisis." The 14th Bohai Sea Steel Forum Forum and the Lange Steel Network 2018 conference took place on the morning of November 24th. "At the meeting, China's Iron and Steel Association (hereinafter referred to as the Association of the Chinese Steel Association) and Secretary General Liu Zhengjiang made such a resume at the opening.
Daily Economic News reporter noted that although it is not yet at the end of the year, Liu Zhenjiang's assessment of the industry's development this year is not unreasonable, as compared to the same period of history, the operating performance of the steel industry have achieved good results since 2018. And fluctuations are minimal.
Separate capacity to help the steel industry achieve 10 years of success
"Steel production has increased, steel prices have stabilized within a reasonable range, and corporate profits have improved, and the quality and efficiency of industry operations are in a more stable and better condition than a year," said Liu Zhangyan.
According to the latest China Steel Association data, the average daily production of raw steel in the key steel factories in the country at the beginning of November was 1,196,400 tons, which is 0.57% more than the end of October. At the end of November, steel stocks of key steel plants were 12.228 million tons, an increase of 0.07% at the end of October.
Earlier on November 10, Qu Xiuli, vice president of the China Steel Association, said publicly that annual crude oil production sustained a small growth trend that is expected to exceed 900 million tons. In the fourth quarter, the performance of steel companies will decline and growth will continue throughout the year.
In a conversation with a Daily Economic News reporter, the steel company respondent said the benefits were good and that it was not intuitive to see the companies involved in it. "It's hard to find first place this year, they can not get a fee for the meeting."
Because the current steel industry has generally improved, Liu Zhenjiang believes that "there is a change in the business concept of an enterprise, but rather because of structural supply-side reforms that make the Chinese steel industry face the future with new look ".
In early 2016 the State Council offered a total of between 1 and 150 million tonnes of crude steel during the 13th five-year period. In 2016 and 2017, the cumulative reduction in production capacity of crude steel in the country exceeded 120 million tonnes, and more than 80% of the tasks at the upper limit were completed.
According to the information provided by the Ministry of Industry and Information Technology, it is planned to reduce the capacity of crude steel by 30 million tonnes in 2018. Judging by the current capacity reduction, the objective of reducing the steel production capacity by 150 million tonnes will be completed two years earlier. In addition, 140 million tons of steel strip, which has long ruined the market order, was completely cleared in 2017.
"In 2016, we quickly turned the unstable situation in 2015. In 2016 and 2017, we continued playing for two years, and in 2018 we continued to move forward," concluded Liu.
In the first nine months of this year, the total profit of China Steel Association members amounted to 230 billion yuan, up 86.01% yoy, while sales revenue was 7.5%, an increase of 2.88 percentage points over the same period of the previous year.
Man of the Iron and Steel Company, Bohai, told Daily Economic News that supply-side reforms have altered the link between supply and demand on the steel market. The situation of oversupply has improved and steel prices are strongly supported.
On November 21, the China Iron and Steel Association published a report in which the steel company CSPI China, the steel price index, was 121.72 points, which is 0.08 points or 0.07% and is 5.76 points or 4.97% at the end of October. Indeed, since 2017, steel prices in the domestic market have been on the rise.
CSPI steel price index Source: China Iron and Steel Association
The market may have great fluctuations in 2019.
According to the Chinese Steel Association after the October entry, the domestic market is still in the highest steel demand season, steel production remains at a high level, and steel prices remain broadly stable. In the later period, when weather becomes cold and the intensity of demand weakens, the price of steel will fluctuate.
"Since the fourth quarter, the steel industry has changed steadily, and overall instability is not great, but there will be more challenges in the fourth quarter and 2019." In the face of hundreds of representatives of the steel and steel industry, Liu Zhengyan,
However, as compared to the continuous improvement in 2018, the steel industry, which is undergoing supply-side reforms, could cause market volatility in 2019 due to overproduction.
Hang Wadong, Senior Expert at Lange Steel and Tianjin Youfa Steel Group Vice President, said the key issue is in the industry itself. The demand is expected to remain unchanged in 2019. If production grows too much, it will lead to market volatility.
Han Weidong's base is that China's raw production was 832 million tonnes in 2017, and for the first time in 2018, crude oil production in China is expected to exceed the 900 millionth whole.
At the same time, Han Weidong told reporter "Daily Economic News" that the exchange capacity between steel companies would be put into production at the end of this and next year, which will inevitably lead to a continuing increase in steel production.
According to Chen Kexin, chief analyst at the Lange Steel Economic Research Center, the reason why steel companies actively increase production is that the steel gain level is very high. "The yield per tonne of steel products reached 1000 yuan, of course, we must take advantage of the opportunity to expand production."
In fact, increasing capacity utilization is also one of the initial intentions to eliminate overcapacity. According to the Chinese Steel Association, from January to September this year, the capacity utilization rate of the steel industry was 78.1%, higher than the average for the country. According to the previous plan of the Ministry of Industry and Information Technology, the production capacity of raw steel will be below 1 billion tonnes in 2020, the capacity utilization rate will increase to 80% and the concentration of the top 10 steel companies will reach 60% .
Han Weidong said the domestic demand for steel is expected to be in line with 2018 in 2019, but that part of production will break the balance, and market instability is inevitable.
Reporter "Daily Economic News" noted that by the end of 2018, the volatility in the steel market, which Han Weidong was worried about, showed some signs. Lange Steel data showed that the spot market market picked up in three weeks, and sales declined for three consecutive weeks, dropping to 3,400 metric tons on Wednesday and a cumulative decline in three weeks to 360 yuan per ton, from the highest point of the year to 4,110 yuan / Tons have fallen by more than 17%.
A steel company company told a daily Economic News reporter that the current demand for steel terminals is not good, the inventory of the steel industry continues to accumulate, output is always high, and the frequency of fluctuations in market prices is expected increase.Go back to Sohu and see more
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