Low volatility in the steel market is still continuing
2018-06-19 05:00:05
Deputy Secretary-General of the Steel Association Qu Xiuli talked about the economic operation of the steel industry On the afternoon of July 29, Qu Xiuli, deputy secretary-general of the China Iron and Steel Association and director of the financial assets department of the China Iron and Steel Association, gave a lecture on the economic operation of the steel industry and the main issues that should be paid attention in the later period. report.
The growth of steel production and demand to maintain the growth of the steel market fluctuations Qu Xiuli pointed out that in the first half of 2011, the world economy showed a slow recovery, and China’s economy continued to maintain stable and rapid growth. Global economic growth has provided a relatively favorable market environment for the development of the steel industry. Iron and steel enterprises have achieved stable production growth, optimized export structure, improved technical indicators and improved economic efficiency by adjusting product mix, saving energy and reducing emissions, strengthening management, and tapping potential targets. . However, due to the sharp increase in the price of raw materials, the adjustment of national monetary policy, the rapid release of steel production capacity, and the deceleration of the downstream steel industry, the steel industry showed market fluctuations, tight capital supply, and cost reduction and efficiency increase. With the increasing difficulty and other characteristics, the business environment faced by steel companies is more difficult.
First, steel production has grown steadily, the growth rate has dropped, and the level of Nissan has reached a record high.
In the first half of the year, China’s crude steel production reached a record high again. From January to June, the national average daily output of crude steel was 1,936,700 tons, equivalent to an annual output of 706 million tons. In June, the daily output was the highest, equivalent to an annual output of 729 million tons of crude steel.
Global crude steel production keeps growing. China's growth rate is above average. According to the statistics of the World Iron and Steel Association (WSA), from January to June, China's steel output increased by 57.1% of the global increase.
At the same time, domestic production of iron ore increased by more than 100 million tons, and the growth rate remained above 20%, which played an important role in relieving the contradiction between supply and demand of iron ore.
Second, the variety structure continues to adjust and the proportion of long products exceeds that of strips.
The year 2011 is the beginning of China's "12th Five-Year Plan". In the first half of the year, China’s investment in fixed assets reached 1,245.6 billion yuan, a year-on-year increase of 25.6%, of which real estate development investment reached 2,625 billion yuan, a year-on-year increase of 32.9%. It still maintained a relatively rapid growth, and the demand for long products was significantly boosted. The industrial added value of above-scale industries in the country increased by 14.3% year-on-year, which is a steady increase, and has a limited effect on the demand for production steel. The major steel products, except for a slight reduction in railroad steel production, have all maintained varying degrees of growth. The growth of long products has been higher than that of strips, and the proportion of steel products has exceeded that of strips.
Third, there has been a slight increase in exports of steel products and the structure has been significantly optimized.
In the first half of the year, with the global economy slowly recovering, the demand for steel in the international market has increased, and with the high international steel prices, the export volume of China's steel products has continued to grow, reaching a peak in March. However, due to sluggish growth in international market demand and falling prices, exports in the second quarter declined; steel imports were relatively stable, and imports fell slightly due to price fluctuations in the domestic market.
In the first half of the year, the average price of China's steel exports was 1023.23 U.S. dollars per ton, compared with 792.22 U.S. dollars per ton in the same period of last year, an increase of 231.01 U.S. dollars per tonne or 29.16% year-on-year, including price increase factors, but mainly due to the export ratio of high value-added products. increase. The average price of imported steel in the first half of the year was US$1,366.61/ton, which was US$185.65/ton higher than US$1,180.96/ton in the same period of last year, representing an increase of 15.72%. The main reason was that the price increase and the import of high value-added products decreased, such as stainless steel strip and galvanized steel. The imports of boards (bands), tinplates (belts), cold-rolled thin broadband products, etc. have declined.
In the first half of this year, China’s exports of coated plates (bands), color-coated plates (belts), mid-plates, and cold-rolled thin strips increased more, and exports of medium-thickness and wide-strips fell sharply. From January to June, the proportion of strip and strip exports decreased by 4.55 percentage points over the same period of last year, the proportion of long products exports increased by 1.25 percentage points year-on-year, and the proportion of pipe exports increased by 2.73 percentage points year-on-year. In the first half of the year, there were 8 regional organizations and countries (regions) with steel exports exceeding 1 million tons, accounting for 89.33% of total exports. Exports to the EU and South Korea increased significantly from the same period last year to other Asian countries and the South. The volume of exports from the Americas declined.
At the same time, due to the growth of domestic steel production, the import volume of iron ore has been growing. In the first half of the year, China imported a total of 334.25 million tons of iron ore, an increase of 24.97 million tons, an increase of 8.1%; a total of ** 53.77 billion US dollars, an increase of 19.293 billion US dollars, an increase of 56.0%.
Fourth, the demand for steel products has increased, and stocks have been declining.
In the first half of the year, China’s economy continued to maintain rapid growth. GDP (gross domestic product) increased by 9.6% year-on-year. Although the second quarter fell slightly compared to the first quarter, it still maintained rapid growth, indicating that domestic market demand was still relatively strong. . However, due to high market expectations at the beginning of the year, steel inventories in January and February rose sharply and peaked in February. After March, with the start of the market and the adjustment of the national monetary policy, stocks have declined month by month. With the exception of hot-rolled coils, inventory of most varieties is still higher than that at the beginning of the year.
In the first half of the year, the apparent consumption of domestic crude steel reached 33,388.3 million tons, an increase of 8.56% year-on-year; the growth in consumption in the second quarter was significantly higher. In the first half of the year, except for the growth rate of air-conditioners, industrial boilers, tractors, and power generation equipment, which was mainly used in the steel industry in China, output growth of other industries was significantly lower than that of the same period of last year.
Fifth, the price of steel products fluctuates, and the overall level is higher than last year.
In the first half of the year, domestic steel prices fluctuate due to various complicated factors, but the overall level was higher than last year. Among them, January-February, steel prices continued to rise in the fourth quarter of last year, in March there was a clear decline, from April to May has picked up, since the end of June began to fall slightly again. At the end of June, the domestic composite steel price index was 134.40 points, up only 6.11 points or 4.76% from the beginning of the year. Among them, the long product price index was 141.76 points, an increase of 7.01 points or 5.20% from the beginning of the year, and the sheet index was 129.82 points, an increase of 5.30 points or 4.26% from the beginning of the year. In the first half of the year, the price of steel fluctuates significantly, but the volatility is not significant. The long product price trend is better than that of sheet metal.
In the international market, steel prices continued to rise at the end of last year and fell gradually in the second quarter. The main reason is due to the slowdown in global economic growth and the fall in demand. The price of long products fluctuated less, and the price index was stable at more than 229 points. The price of sheet metal rose rapidly in the first quarter and declined month-on-month after the second quarter. The European steel price has apparently declined since March. Asian steel prices have started to decline since April, and North American steel prices have declined since May.
Sixth, the increase in fixed assets investment in the steel industry has increased year-on-year.
From January to June, the growth rate of investment in fixed assets in the steel industry was lower than the national growth level, but higher than that in the same period of last year, black mining investment was still higher than smelting and rolling. From January to June, the ferrous metal smelting and rolling processing industry (excluding mines) completed an investment of 166.27 billion yuan, a year-on-year increase of 14.8%, and an increase of 7.7 percentage points from January to May, mainly due to June. The amount of investment increased more.
Seventh, the increase in output of SMEs is relatively large, and the degree of industrial concentration has declined slightly.
The growth rate of production outside the member units is relatively high. In the first half of this year, the crude steel output of steel association members increased by 6.2% year-on-year, while other small and medium-sized enterprises increased by 31.8%; the top 10 crude steel production accounted for only 48.28%, a slight decrease from 2010.
Qu Xiuli pointed out that the operation of the industry in the first half of the year has some implications for us:
First, in the first half of the year, China’s economy maintained growth. The demand for steel products also increased accordingly, and exports also increased. Inventories also fell month by month in the second quarter. However, the market presented a situation of oversupply and frequent price fluctuations. The key issue was the release of production capacity. fast. To maintain market stability, reasonable control of production capacity is the key link.
Second, the demand for long products is strong and the plate is relatively weak, reflecting the fact that China’s fixed asset investment is still the main driving force for economic growth at the stage of emergence, and it is also an objective requirement for China’s industrialization and urbanization process. Enterprises should align their own product structure with the market demand structure.
Thirdly, the increase in output of small and medium-sized enterprises is too high. The industrial concentration of the top ten companies has declined and the increase in investment in fixed assets in the steel industry has increased. This shows that the enthusiasm for local investment in steel is still high, and the task of restructuring the industry and eliminating backward production capacity is arduous.
The low-profit operating status of iron and steel enterprises is still continuing to show that the market environment faced by the steel industry in the first half of the year is relatively complex. Although steel production continues to grow and steel prices are higher than last year's level, due to the substantial increase in raw material prices and corporate financing With the impact of rising costs and other factors, large and medium-sized steel companies have achieved a relatively small increase in their economic performance year-on-year while achieving significant increases in output value and income, and are still operating at low profit levels.
In the first half of the year, the total output value of the iron and steel industry increased by 22.5% year-on-year, and product sales revenue increased by 24.08% year-on-year, but the cost of product sales increased by 25.31% year-on-year, and the increase in cost was greater than the growth rate of sales revenue, resulting in only 8.01% year-on-year growth in profits, taxes, and profits. 9.85%, the increase is relatively small.
In the first half of the year, the average sales margin of large and medium-sized steel companies was 3.14%, down 0.4% year-on-year. If investment income, non-operating income, and other factors were deducted, the main business profit margin was 2.55%, down 0.47 percentage point year-on-year. The sales profit rate of iron and steel enterprises is lower than the average profit rate of industrial enterprises in the country.
Qu Xiuli pointed out that in the first half of the year, with the increase in steel production and inflationary pressures, the prices of raw materials such as iron ore, coal and coke rose sharply. In particular, the price of imported iron ore rose, driving up the cost of steel production. Coupled with the increase in capital costs and labor costs, the costs and expenses of steel companies have risen significantly, putting greater pressure on companies to reduce costs and increase efficiency. Its specific perspective is mainly reflected in the following aspects:
First, the cost of raw fuel purchases rose sharply. In the first half of the year, the price of imported iron ore (powder ore) rose the most, reaching 37.4%; domestic iron concentrate prices rose the second, 24.74%; the increase in the price of injected coal and scrap also exceeded 20%.
The second is the corresponding increase in the production costs of iron and steel enterprises. As the price of raw materials such as iron ore rose sharply year-on-year, the manufacturing cost of steelmaking pig iron units rose by 22.26% year-on-year, which has been rising for several months.
Third, the cost of the period increased year-on-year, with the largest increase in financial expenses. In the first half of the year, the cost of the period increased by 15.2% year-on-year, which was affected by factors such as increased bank borrowings and ** interest rate increases. The maximum increase in financial expenses reached 33.79%, and the increase in financial expenses accounted for 58.77% of the increase in the period.
At the same time, as the scale of production expands, the level of assets and liabilities has increased. However, the increase in liabilities is greater than the increase of assets by 2.9 percentage points, and the increase in accounts payable accounts for more than 8.08 percentage points of accounts receivable, which has increased the pressure on corporate funds. By the end of June, the production debt ratio of large and medium-sized steel enterprises reached 65.59%, an increase of 1.6 percentage points over the same period of last year, and the asset-liability ratio of enterprises of different scales increased year-on-year, and the debt-to-equity ratio of some enterprises had exceeded 100%.
In the second half of the year, the development of the industry must pay attention to four issues. For the changes in the development environment of the iron and steel industry in the second half of the year, Qu Xiuli believes that the following points must be observed:
First, global economic growth has slowed down, and the increase in steel demand has fallen.
At present, international monetary organizations, the World Bank, the United Nations and other agencies have lowered their forecast for world economic growth in 2011. For instance, the International Monetary Authority has lowered its global economic growth forecast from 4.4% in April to 4.3%. However, judging from the base effect, the global economy will still maintain a moderate recovery, and demand for steel products will continue to grow. According to the latest report released by the World Iron and Steel Institute for the medium and short term steel demand outlook for 2011, the global apparent steel consumption of finished steel products will increase by 5.9% to 1.359 billion tons in 2011.
Second, the demand for steel products continues to grow and the market still exceeds supply.
The focus of this year's state macroeconomic regulation and control is to return the economy from a supernormal rapid growth to a regular equilibrium growth, that is, to recover from the response to the international financial crisis, the sharp recovery from the sharp recovery to the moderate growth interval.
In the second half of the year, irrigation and water conservancy facilities and affordable housing construction will be the focus of investment, and investment in fixed assets will continue to grow at a relatively fast pace. However, after 2008, a series of economic stimulus policies introduced by the state will gradually withdraw, which will have an impact on the growth in the demand for steel products for sheet metal production. Coupled with the continuous increase in the level of crude steel production, the steel market will continue to be in a situation where supply exceeds demand. Due to the large amount of infrastructure construction such as affordable housing and farmland water conservancy, the supply and demand situation of long products is relatively better, and the situation in which the supply of plates and strips exceeds demand is severe, and the market competition will be fiercer.
Third, the high cost and low profitability of the steel industry are difficult to reverse.
In the second half of the year, the steel market is still in a wave of momentum and steel prices are unlikely to rise significantly. However, raw fuel prices such as iron ore, coal and coke will continue to be at a high level due to the demand growth and input-type inflation. On June 1, the country has raised the prices of industrial electricity in 15 provinces and cities, and the resource tax reform plan has been reported to the State Council. Coupled with the increase in capital costs and labor costs, steel companies will still face the dual pressures of high costs and fluctuations in steel prices. The low profitability of the steel industry will be difficult to reverse.
Fourth, the difficulty of financing increased and the cost of capital increased.
In order to control inflation and strengthen liquidity management, the central bank has raised the deposit reserve ratio six consecutive times this year. It has now reached the highest historical rate of 21.5%, equivalent to recycling social funds of more than RMB 2 trillion; and raising the bank’s deposit base rate three times. . With the high CPI (consumer price index), there will be no major changes in the macro-control policies in the second half of the year. There is limited room for monetary policy relaxation. Iron and steel companies will continue to face the pressure of tight funding and the cost of capital will continue to rise.
As for how to improve the quality of economic operation, Qu Xiuli proposed the following suggestions:
The first is to actively adjust the product structure and organize production according to demand.
The sales profit rate of iron and steel enterprises has remained at a relatively low level for several consecutive years. It has a direct relationship with the blind expansion of some enterprises and the production varieties that do not meet market demand. The iron and steel enterprises must change the mode of development, strictly control the excessive growth of production capacity and output, actively adjust the product structure, and organize production according to market demand.
We must continue to adhere to the business policy of setting production by sales, not contracting, not organizing production, lowering the cost of manufacturing, and not producing, and working hard to tap the market and develop the market. In accordance with the changes in national policies and changes in market demand, the company will adjust its market development strategy, strive to increase the production of highly profitable products, and improve the overall efficiency of the company.
The second is to carry out in-depth benchmarking, and vigorously reduce costs and expenses.
The raw material and energy costs of steel products account for more than 80% of the total cost, which is the most important factor affecting steel production costs. Iron and steel companies must make good use of domestic and foreign resources to strengthen control over iron ore and other resources and energy products. In particular, the base construction of key products such as iron ore and coal will stabilize supply channels and reduce procurement costs.
It is necessary to carry out in-depth activities on standardization, cost reduction and potential reduction, find gaps, tap potentials, continuously improve technical and economic indicators, strengthen internal management, vigorously reduce costs and increase market competitiveness. At the same time, as the country continues to raise interest rates, companies need to plan for funds and strive to reduce financial costs. It is necessary to strengthen the scientific and forward-looking research on the feasibility of pre-investment projects in the early stage of the investment project so as to avoid the lack of market and high cost of the project after the project is put into production, which will bring greater pressure on the production and operation of the enterprise.
The third is to strengthen the management of funds and pay attention to controlling the risk of funds.
In recent years, the production of steel has continued to increase, and the use of inventory funds has increased. Bank loans and accounts payables have increased. The level of corporate liabilities has increased year by year. When the central bank raises the reserve ratio multiple times, steel companies should strengthen risk control, work hard to mobilize funds, accelerate capital turnover, and ensure the normal operation of production and operations.
It is necessary to give full play to the role of financial companies in enterprise groups, and rigorously manage the centralized management of funds within the group to increase the efficiency of fund use and ease the difficulties of the company's funds.
The fourth is to standardize sales, strengthen self-discipline, and ensure the achievement of operating results.
In the steel market oversupply situation, market competition will be more intense. Iron and steel enterprises must strengthen their sales and self-discipline work in order to maintain normal production and operation and obtain reasonable economic benefits.
It is necessary to establish stable sales channels, increase the proportion of direct supply products, establish stable and coordinated trade relations with downstream users, formulate scientific and reasonable sales policies, standardize sales practices, avoid blind price competition and disorderly competition, and resolutely prohibit production costs below production costs. The low-cost dumping acts provide safeguards for maintaining a fair market environment and for enterprises to achieve better operating results.
The growth of steel production and demand to maintain the growth of the steel market fluctuations Qu Xiuli pointed out that in the first half of 2011, the world economy showed a slow recovery, and China’s economy continued to maintain stable and rapid growth. Global economic growth has provided a relatively favorable market environment for the development of the steel industry. Iron and steel enterprises have achieved stable production growth, optimized export structure, improved technical indicators and improved economic efficiency by adjusting product mix, saving energy and reducing emissions, strengthening management, and tapping potential targets. . However, due to the sharp increase in the price of raw materials, the adjustment of national monetary policy, the rapid release of steel production capacity, and the deceleration of the downstream steel industry, the steel industry showed market fluctuations, tight capital supply, and cost reduction and efficiency increase. With the increasing difficulty and other characteristics, the business environment faced by steel companies is more difficult.
First, steel production has grown steadily, the growth rate has dropped, and the level of Nissan has reached a record high.
In the first half of the year, China’s crude steel production reached a record high again. From January to June, the national average daily output of crude steel was 1,936,700 tons, equivalent to an annual output of 706 million tons. In June, the daily output was the highest, equivalent to an annual output of 729 million tons of crude steel.
Global crude steel production keeps growing. China's growth rate is above average. According to the statistics of the World Iron and Steel Association (WSA), from January to June, China's steel output increased by 57.1% of the global increase.
At the same time, domestic production of iron ore increased by more than 100 million tons, and the growth rate remained above 20%, which played an important role in relieving the contradiction between supply and demand of iron ore.
Second, the variety structure continues to adjust and the proportion of long products exceeds that of strips.
The year 2011 is the beginning of China's "12th Five-Year Plan". In the first half of the year, China’s investment in fixed assets reached 1,245.6 billion yuan, a year-on-year increase of 25.6%, of which real estate development investment reached 2,625 billion yuan, a year-on-year increase of 32.9%. It still maintained a relatively rapid growth, and the demand for long products was significantly boosted. The industrial added value of above-scale industries in the country increased by 14.3% year-on-year, which is a steady increase, and has a limited effect on the demand for production steel. The major steel products, except for a slight reduction in railroad steel production, have all maintained varying degrees of growth. The growth of long products has been higher than that of strips, and the proportion of steel products has exceeded that of strips.
Third, there has been a slight increase in exports of steel products and the structure has been significantly optimized.
In the first half of the year, with the global economy slowly recovering, the demand for steel in the international market has increased, and with the high international steel prices, the export volume of China's steel products has continued to grow, reaching a peak in March. However, due to sluggish growth in international market demand and falling prices, exports in the second quarter declined; steel imports were relatively stable, and imports fell slightly due to price fluctuations in the domestic market.
In the first half of the year, the average price of China's steel exports was 1023.23 U.S. dollars per ton, compared with 792.22 U.S. dollars per ton in the same period of last year, an increase of 231.01 U.S. dollars per tonne or 29.16% year-on-year, including price increase factors, but mainly due to the export ratio of high value-added products. increase. The average price of imported steel in the first half of the year was US$1,366.61/ton, which was US$185.65/ton higher than US$1,180.96/ton in the same period of last year, representing an increase of 15.72%. The main reason was that the price increase and the import of high value-added products decreased, such as stainless steel strip and galvanized steel. The imports of boards (bands), tinplates (belts), cold-rolled thin broadband products, etc. have declined.
In the first half of this year, China’s exports of coated plates (bands), color-coated plates (belts), mid-plates, and cold-rolled thin strips increased more, and exports of medium-thickness and wide-strips fell sharply. From January to June, the proportion of strip and strip exports decreased by 4.55 percentage points over the same period of last year, the proportion of long products exports increased by 1.25 percentage points year-on-year, and the proportion of pipe exports increased by 2.73 percentage points year-on-year. In the first half of the year, there were 8 regional organizations and countries (regions) with steel exports exceeding 1 million tons, accounting for 89.33% of total exports. Exports to the EU and South Korea increased significantly from the same period last year to other Asian countries and the South. The volume of exports from the Americas declined.
At the same time, due to the growth of domestic steel production, the import volume of iron ore has been growing. In the first half of the year, China imported a total of 334.25 million tons of iron ore, an increase of 24.97 million tons, an increase of 8.1%; a total of ** 53.77 billion US dollars, an increase of 19.293 billion US dollars, an increase of 56.0%.
Fourth, the demand for steel products has increased, and stocks have been declining.
In the first half of the year, China’s economy continued to maintain rapid growth. GDP (gross domestic product) increased by 9.6% year-on-year. Although the second quarter fell slightly compared to the first quarter, it still maintained rapid growth, indicating that domestic market demand was still relatively strong. . However, due to high market expectations at the beginning of the year, steel inventories in January and February rose sharply and peaked in February. After March, with the start of the market and the adjustment of the national monetary policy, stocks have declined month by month. With the exception of hot-rolled coils, inventory of most varieties is still higher than that at the beginning of the year.
In the first half of the year, the apparent consumption of domestic crude steel reached 33,388.3 million tons, an increase of 8.56% year-on-year; the growth in consumption in the second quarter was significantly higher. In the first half of the year, except for the growth rate of air-conditioners, industrial boilers, tractors, and power generation equipment, which was mainly used in the steel industry in China, output growth of other industries was significantly lower than that of the same period of last year.
Fifth, the price of steel products fluctuates, and the overall level is higher than last year.
In the first half of the year, domestic steel prices fluctuate due to various complicated factors, but the overall level was higher than last year. Among them, January-February, steel prices continued to rise in the fourth quarter of last year, in March there was a clear decline, from April to May has picked up, since the end of June began to fall slightly again. At the end of June, the domestic composite steel price index was 134.40 points, up only 6.11 points or 4.76% from the beginning of the year. Among them, the long product price index was 141.76 points, an increase of 7.01 points or 5.20% from the beginning of the year, and the sheet index was 129.82 points, an increase of 5.30 points or 4.26% from the beginning of the year. In the first half of the year, the price of steel fluctuates significantly, but the volatility is not significant. The long product price trend is better than that of sheet metal.
In the international market, steel prices continued to rise at the end of last year and fell gradually in the second quarter. The main reason is due to the slowdown in global economic growth and the fall in demand. The price of long products fluctuated less, and the price index was stable at more than 229 points. The price of sheet metal rose rapidly in the first quarter and declined month-on-month after the second quarter. The European steel price has apparently declined since March. Asian steel prices have started to decline since April, and North American steel prices have declined since May.
Sixth, the increase in fixed assets investment in the steel industry has increased year-on-year.
From January to June, the growth rate of investment in fixed assets in the steel industry was lower than the national growth level, but higher than that in the same period of last year, black mining investment was still higher than smelting and rolling. From January to June, the ferrous metal smelting and rolling processing industry (excluding mines) completed an investment of 166.27 billion yuan, a year-on-year increase of 14.8%, and an increase of 7.7 percentage points from January to May, mainly due to June. The amount of investment increased more.
Seventh, the increase in output of SMEs is relatively large, and the degree of industrial concentration has declined slightly.
The growth rate of production outside the member units is relatively high. In the first half of this year, the crude steel output of steel association members increased by 6.2% year-on-year, while other small and medium-sized enterprises increased by 31.8%; the top 10 crude steel production accounted for only 48.28%, a slight decrease from 2010.
Qu Xiuli pointed out that the operation of the industry in the first half of the year has some implications for us:
First, in the first half of the year, China’s economy maintained growth. The demand for steel products also increased accordingly, and exports also increased. Inventories also fell month by month in the second quarter. However, the market presented a situation of oversupply and frequent price fluctuations. The key issue was the release of production capacity. fast. To maintain market stability, reasonable control of production capacity is the key link.
Second, the demand for long products is strong and the plate is relatively weak, reflecting the fact that China’s fixed asset investment is still the main driving force for economic growth at the stage of emergence, and it is also an objective requirement for China’s industrialization and urbanization process. Enterprises should align their own product structure with the market demand structure.
Thirdly, the increase in output of small and medium-sized enterprises is too high. The industrial concentration of the top ten companies has declined and the increase in investment in fixed assets in the steel industry has increased. This shows that the enthusiasm for local investment in steel is still high, and the task of restructuring the industry and eliminating backward production capacity is arduous.
The low-profit operating status of iron and steel enterprises is still continuing to show that the market environment faced by the steel industry in the first half of the year is relatively complex. Although steel production continues to grow and steel prices are higher than last year's level, due to the substantial increase in raw material prices and corporate financing With the impact of rising costs and other factors, large and medium-sized steel companies have achieved a relatively small increase in their economic performance year-on-year while achieving significant increases in output value and income, and are still operating at low profit levels.
In the first half of the year, the total output value of the iron and steel industry increased by 22.5% year-on-year, and product sales revenue increased by 24.08% year-on-year, but the cost of product sales increased by 25.31% year-on-year, and the increase in cost was greater than the growth rate of sales revenue, resulting in only 8.01% year-on-year growth in profits, taxes, and profits. 9.85%, the increase is relatively small.
In the first half of the year, the average sales margin of large and medium-sized steel companies was 3.14%, down 0.4% year-on-year. If investment income, non-operating income, and other factors were deducted, the main business profit margin was 2.55%, down 0.47 percentage point year-on-year. The sales profit rate of iron and steel enterprises is lower than the average profit rate of industrial enterprises in the country.
Qu Xiuli pointed out that in the first half of the year, with the increase in steel production and inflationary pressures, the prices of raw materials such as iron ore, coal and coke rose sharply. In particular, the price of imported iron ore rose, driving up the cost of steel production. Coupled with the increase in capital costs and labor costs, the costs and expenses of steel companies have risen significantly, putting greater pressure on companies to reduce costs and increase efficiency. Its specific perspective is mainly reflected in the following aspects:
First, the cost of raw fuel purchases rose sharply. In the first half of the year, the price of imported iron ore (powder ore) rose the most, reaching 37.4%; domestic iron concentrate prices rose the second, 24.74%; the increase in the price of injected coal and scrap also exceeded 20%.
The second is the corresponding increase in the production costs of iron and steel enterprises. As the price of raw materials such as iron ore rose sharply year-on-year, the manufacturing cost of steelmaking pig iron units rose by 22.26% year-on-year, which has been rising for several months.
Third, the cost of the period increased year-on-year, with the largest increase in financial expenses. In the first half of the year, the cost of the period increased by 15.2% year-on-year, which was affected by factors such as increased bank borrowings and ** interest rate increases. The maximum increase in financial expenses reached 33.79%, and the increase in financial expenses accounted for 58.77% of the increase in the period.
At the same time, as the scale of production expands, the level of assets and liabilities has increased. However, the increase in liabilities is greater than the increase of assets by 2.9 percentage points, and the increase in accounts payable accounts for more than 8.08 percentage points of accounts receivable, which has increased the pressure on corporate funds. By the end of June, the production debt ratio of large and medium-sized steel enterprises reached 65.59%, an increase of 1.6 percentage points over the same period of last year, and the asset-liability ratio of enterprises of different scales increased year-on-year, and the debt-to-equity ratio of some enterprises had exceeded 100%.
In the second half of the year, the development of the industry must pay attention to four issues. For the changes in the development environment of the iron and steel industry in the second half of the year, Qu Xiuli believes that the following points must be observed:
First, global economic growth has slowed down, and the increase in steel demand has fallen.
At present, international monetary organizations, the World Bank, the United Nations and other agencies have lowered their forecast for world economic growth in 2011. For instance, the International Monetary Authority has lowered its global economic growth forecast from 4.4% in April to 4.3%. However, judging from the base effect, the global economy will still maintain a moderate recovery, and demand for steel products will continue to grow. According to the latest report released by the World Iron and Steel Institute for the medium and short term steel demand outlook for 2011, the global apparent steel consumption of finished steel products will increase by 5.9% to 1.359 billion tons in 2011.
Second, the demand for steel products continues to grow and the market still exceeds supply.
The focus of this year's state macroeconomic regulation and control is to return the economy from a supernormal rapid growth to a regular equilibrium growth, that is, to recover from the response to the international financial crisis, the sharp recovery from the sharp recovery to the moderate growth interval.
In the second half of the year, irrigation and water conservancy facilities and affordable housing construction will be the focus of investment, and investment in fixed assets will continue to grow at a relatively fast pace. However, after 2008, a series of economic stimulus policies introduced by the state will gradually withdraw, which will have an impact on the growth in the demand for steel products for sheet metal production. Coupled with the continuous increase in the level of crude steel production, the steel market will continue to be in a situation where supply exceeds demand. Due to the large amount of infrastructure construction such as affordable housing and farmland water conservancy, the supply and demand situation of long products is relatively better, and the situation in which the supply of plates and strips exceeds demand is severe, and the market competition will be fiercer.
Third, the high cost and low profitability of the steel industry are difficult to reverse.
In the second half of the year, the steel market is still in a wave of momentum and steel prices are unlikely to rise significantly. However, raw fuel prices such as iron ore, coal and coke will continue to be at a high level due to the demand growth and input-type inflation. On June 1, the country has raised the prices of industrial electricity in 15 provinces and cities, and the resource tax reform plan has been reported to the State Council. Coupled with the increase in capital costs and labor costs, steel companies will still face the dual pressures of high costs and fluctuations in steel prices. The low profitability of the steel industry will be difficult to reverse.
Fourth, the difficulty of financing increased and the cost of capital increased.
In order to control inflation and strengthen liquidity management, the central bank has raised the deposit reserve ratio six consecutive times this year. It has now reached the highest historical rate of 21.5%, equivalent to recycling social funds of more than RMB 2 trillion; and raising the bank’s deposit base rate three times. . With the high CPI (consumer price index), there will be no major changes in the macro-control policies in the second half of the year. There is limited room for monetary policy relaxation. Iron and steel companies will continue to face the pressure of tight funding and the cost of capital will continue to rise.
As for how to improve the quality of economic operation, Qu Xiuli proposed the following suggestions:
The first is to actively adjust the product structure and organize production according to demand.
The sales profit rate of iron and steel enterprises has remained at a relatively low level for several consecutive years. It has a direct relationship with the blind expansion of some enterprises and the production varieties that do not meet market demand. The iron and steel enterprises must change the mode of development, strictly control the excessive growth of production capacity and output, actively adjust the product structure, and organize production according to market demand.
We must continue to adhere to the business policy of setting production by sales, not contracting, not organizing production, lowering the cost of manufacturing, and not producing, and working hard to tap the market and develop the market. In accordance with the changes in national policies and changes in market demand, the company will adjust its market development strategy, strive to increase the production of highly profitable products, and improve the overall efficiency of the company.
The second is to carry out in-depth benchmarking, and vigorously reduce costs and expenses.
The raw material and energy costs of steel products account for more than 80% of the total cost, which is the most important factor affecting steel production costs. Iron and steel companies must make good use of domestic and foreign resources to strengthen control over iron ore and other resources and energy products. In particular, the base construction of key products such as iron ore and coal will stabilize supply channels and reduce procurement costs.
It is necessary to carry out in-depth activities on standardization, cost reduction and potential reduction, find gaps, tap potentials, continuously improve technical and economic indicators, strengthen internal management, vigorously reduce costs and increase market competitiveness. At the same time, as the country continues to raise interest rates, companies need to plan for funds and strive to reduce financial costs. It is necessary to strengthen the scientific and forward-looking research on the feasibility of pre-investment projects in the early stage of the investment project so as to avoid the lack of market and high cost of the project after the project is put into production, which will bring greater pressure on the production and operation of the enterprise.
The third is to strengthen the management of funds and pay attention to controlling the risk of funds.
In recent years, the production of steel has continued to increase, and the use of inventory funds has increased. Bank loans and accounts payables have increased. The level of corporate liabilities has increased year by year. When the central bank raises the reserve ratio multiple times, steel companies should strengthen risk control, work hard to mobilize funds, accelerate capital turnover, and ensure the normal operation of production and operations.
It is necessary to give full play to the role of financial companies in enterprise groups, and rigorously manage the centralized management of funds within the group to increase the efficiency of fund use and ease the difficulties of the company's funds.
The fourth is to standardize sales, strengthen self-discipline, and ensure the achievement of operating results.
In the steel market oversupply situation, market competition will be more intense. Iron and steel enterprises must strengthen their sales and self-discipline work in order to maintain normal production and operation and obtain reasonable economic benefits.
It is necessary to establish stable sales channels, increase the proportion of direct supply products, establish stable and coordinated trade relations with downstream users, formulate scientific and reasonable sales policies, standardize sales practices, avoid blind price competition and disorderly competition, and resolutely prohibit production costs below production costs. The low-cost dumping acts provide safeguards for maintaining a fair market environment and for enterprises to achieve better operating results.
Mono Solar Panel ,Monocrystalline Solar Panel Co., Ltd. , http://www.chsolarpanels.com