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99 medium-sized steel enterprises in the first half profits surge

We experienced a winter market, steelmakers and finally in August ushered in a very relieved by the "in the test" report card. August 4, informed Steel Association, in the first half into the statistics of 99 large and medium sized steel enterprises achieved revenues of 1.29 trillion members, a total profit of 12.587 billion yuan, an increase 4.27 times.
However, the 2016 steel production capacity is still long way to go, the data show the first half of steel production capacity to complete the 13 million tons, about 30 percent this year to complete the goal, that is the second half of this year, and nearly 70% of the task.
Steel prices profitability
August 4, Xinhua News Agency has continuously published three articles focus the attention of the steel industry survey to capacity problems.
China Hot Dipped Galvanized Steel Sheet to production capacity, has become a Glimpse of the supply-side structural reforms and economic transformation and upgrading of a window, although difficult, but the temper is still ahead.
August 4, China Steel Association released the first half of the member steel enterprises operations, finally, after more than a year of losses of winter, to give the steel industry sent a good news story.
According to CISA statistics, in the first half of this year, benefiting from rising steel prices rebound, the operating conditions Cisa 99 medium-sized members of the general recovery in steel prices, "reversing the situation of the industry-wide losses, achievements are hard won."
China Steel Association data show that from January to June this year, the member steel enterprises realized revenue of 1.29 trillion yuan, down 11.93 percent; but the total profit of 12.587 billion yuan, an increase of 4.27 times; 26 loss-making enterprises, losses 13.69 billion yuan, down 22.8%.
As opposed to, you just past year, the steel industry suffered 10 years of the coldest winter, steel prices above the total annual loss of members reached 64.534 billion yuan, a loss of up to 50.5%.
Huge loss to profit from behind in the end what has changed?
"My steel net" senior steel industry analyst Xu Xiangchun said steel enterprises losses behind rising steel prices and earnings capacity to obtain stage effect, increase in exports and other three main reasons.
First, the rise in steel prices rebound is the most direct factor. "Last year, rebar prices have dropped to the lowest low of 1600 yuan, while March and April of this year, real estate and infrastructure by domestic demand started to pick up, steel prices continued to rise, reached its highest high of 3,000 yuan." Xu Xiangchun April Quotes the best of times, and some steel enterprise, one ton of steel can make a profit over 1000, followed by steel prices fell slightly in may, with an average profit of some steel prices are between 300-500 yuan, "most steel prices in the first half profit losses can, in fact, is to be expected. "
Secondly, the last part of the loss-making steel enterprises were forced to stop production, many provinces initiative to shut down backward production capacity, around the country there are thousands of tons of production capacity out of the market, supply and demand imbalance stage, it also brings the second quarter of this year, the steel city demand to pick up.
In addition, in the case of foreign trade, including the spread obvious, steel prices increased export efforts, but also for the significant increase in profit contribution is not small. Steel Association statistics, in the first half of this year, crude steel production 400 million tons, down 1.1%; the country's steel exports 57.12 million tons, an increase of 4.72 million tons, an increase of 9%; steel imports 6.46 million tons, up 190,000 tons reduction , down 2.8%; net exports equivalent to 52.55 million tons of crude steel, an increase of 5.07 million tons, an increase of 10.7%.
It said rising steel prices brought about corporate earnings losses in WISCO and Angang Steel Group two central enterprises who have been confirmed. July 20, Ma Guoqiang, chairman of Wuhan Iron and Steel Group, Wuhan Iron and Steel in the first half of the business conference, said steel prices this year, Wuhan Iron and Steel to seize the market to pick up the opportunity to control costs in the first half overall losses and profits 703 million yuan. Last year, Wuhan Iron and Steel shares have been huge loss of 7.5 billion domestic A-share market has become the "King of loss."
Similarly, Angang Steel recently released bulletin also showed that first-half profit is expected to achieve 300 million yuan. Anshan Iron and Steel Group as the central enterprises listed on the platform, which in 2015 had the huge loss of 4.6 billion yuan, its biggest loss record to its listing.
After production policies to six months, the most serious overcapacity, deteriorating operation of the steel industry, in the moment, the temporary loss out of the quagmire. Listed days of intensive steel prices released results notice, the profitability has become a common industry-wide trend.
But China Steel Association also pointed out that although members of steel prices overall losses, but its sales profit rate of only 0.97% in the industrial sector is still at a low level, in different regions, forms of ownership, due to the scale of production between different steel prices. " , differ greatly between business efficiency. "
45 million tons only completed 30%
To the second half of the capacity is still arduous task
Due to the excessive expansion of the 2008 financial crisis, the country's crude steel production capacity is up to 12 million tonnes, crude steel production of 800 million tons last year, the actual yield of the entire industry capacity utilization averaged less than 70%.
As commodity winter swept the world, overcapacity of steel industry into the winter market, many domestic steel enterprises have suffered serious losses or even capping debt, capital chain emergency, the verge of bankruptcy.
In the severe overcapacity situation, this year February 1, the State Council issued "on the steel industry to resolve the overcapacity in the development of the views of a turnaround." The document made it clear that "Thirteen Five" period, to 100 million Yajian crude steel production capacity to 1.5 million tons. According to the plan, to be completed during the year 2016 to 45 million tons of production tasks.
Xu Xiangchun, due to 3, a wave of rising steel prices in April, part of the production was forced to stop production of the original have been able to resume production, the process to production capacity has emerged repeatedly, "Many steel mills shut down in the second quarter of this year have been tempted by the profits ignition the resumption of production in April and June of steel daily output hit record highs twice! "
Xinhua News Agency on August 4 article in the survey also mentioned that: "In June this year, China's crude steel output reached 69.47 million tons, equivalent to average daily production of 2.315 million tons, more than the 2.314 million tons in April, the historical peak - while It is vigorous to capacity, while steel production is high, yet the capacity to show the crux to be solved at the implementation level. "
Ministry statistics show that in the first half of this year, the national steel production capacity amounted to more than 1300 tons, accounting for only about 30% of the annual target of 45 million tons.
"The second half of 2016, and 70% of capacity to implement tasks to perform, it can be said very difficult task." Xu Xiangchun said, "whether the implementation in place, the key depends on local governments to produce steady growth and how to balance between energy, regulatory and environmental protection, quality, energy and other sectors can implement. "
Xinhua News Agency article also pointed out that, in addition to rising steel prices, steel production complex, the province reported to the production target and the actual implementation of the ground situation may also be biased. "The data show, this year plan Yajian Hebei steel production capacity of 14.22 million tons; Jiangsu this year plans Yajian crude steel production capacity 3.9 million tons; Shandong plan 'Thirteen Five' Yajian crude steel production capacity of 15 million tons, equivalent to 3 million tons per year only three provinces in the amount of key steel production capacity to add up to this year's production capacity task is almost half finished. "
This year, the State Council in order to properly resolve the production process wealthy personnel placement issues such as steel, coal industry production capacity to set up a special prize up 100 billion yuan of funds. "In order to get around the subsidies may be reported to the positive production goal," but in the end, "is carried out, we still hope that they can be able to shut down off the detailed list to speak."
Steel Association vice president, Metallurgical Industry Planning Research Institute Li Chong on the 4th to the 21st Century Business Herald reporter said on the phone, go to the second half of the iron and steel industry production capacity, still facing debt problems, personnel placement, mergers and acquisitions and other aspects challenge. Steel Association also pointed out that in 2016 to resolve the overcapacity tasks are clear in the second half into the implementation and verification stage, complete resolve the overcapacity task still facing employee relocation and debt disposal two problems, how to properly arrange workers in difficult times, how resolve the debt risk in case of shortage of funds, a lot of work needs to be done.
"The second half of the profit of steel prices can be sustained, it is necessary to look at the implementation of the 45 million tons of production capacity of the task. If put in place, overcapacity has been effectively resolved, steel prices are expected to stabilize, then the whole of the iron and steel enterprises industry profits can be cautiously optimistic. "Li Chong said.

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