Nearly 7 percent in the first half net profit increase market housing prices or prices fall further than expected
Many agencies believe that the steel industry during the traditional peak season in the third quarter will remain robust and were difficult or easy to rise trend, the overall level of profitability is expected in the third quarter than the semi-annual report of listed steel prices data look better, or exceeded industry expectations.
"Golden September and Silver October," season approaching, after which the whole industry profitability improved significantly in the report was released, the stock market fall has quietly opened. Fluctuations in China Prepainted Galvanized Steel Sheet
prices in the first half with different number of institutions research reports that the steel industry during the traditional peak season in the third quarter will remain robust and were difficult or easy to rise trend, the overall level of profitability is expected in the third quarter than the listed steel prices Semi-annual report data look better, or exceeded industry expectations.
But some analysts pointed out that although the situation has improved the profitability of steel prices, but the whole industry into a long downward cycle interval trend has not changed, will continue to face long-term challenges of overcapacity. In addition, steel prices and the consolidation and restructuring of the debt problem will continue to be a period of time, China's steel industry need to work together to tackle a major issue even in the face of tough.
Steel prices in the first half of collective counter-attack
The first half of this year, with lower demand for steel prices stabilized and infrastructure, real estate pick up, the profitability of domestic steel prices have improved nearly 70% year on year net profit of listed steel prices surge.
Institutional Monitoring 46 listed steel enterprises, there are 38 first half earnings to achieve profitability, which has 30-year net profit increase, accounting for 65% of the total; and monitoring of SW 35 listed steel prices in the first half camp amount income totaled 466.117 billion yuan, although compared with the same period in 2015 has declined, but net profit was as high as 4.279 billion yuan, a year earlier, this figure was a loss of 4.094 billion yuan.
From the net profit ranking, the first half net profit of 3.468 billion yuan Baosteel to peer leader, Maanshan Iron and Steel River breakdown of 2,3. Chongqing Iron and Steel, Valin Iron & Steel, * ST vanadium and titanium, respectively -17.90 million -9.46 million -8.36 one hundred million in the first three ranking countdown.
Specifically, the turnaround 10: Anyang Iron and Steel, Baotou Steel shares, shares of Hangzhou Iron and Steel, Jiuquan Hongxing, Liuzhou Iron and Steel shares, Maanshan Iron & Steel, three steel Min light, sand Steel shares, Shougang shares, new steel shares; the increase in profit is there 12: Baosteel, Daye Special steel, a large steel square, River steel shares, Shandong Iron and steel, property extension, Angang steel, Bengang steel plates, Lu silver investment, Nanjing Iron & steel, TISCO not rust, Yongxing Special steel.
China Steel Association statistics also similar to the above steel enterprise performance "counter-attack" trend. China Steel Association data show that 1--7 months, 99 medium-sized steel enterprises realized a total membership sales revenue 1.509974 trillion yuan, down 11.9%; total profit of 16.348 billion yuan, a year earlier loss of 5.438 billion yuan.
In Changjiang Securities research report, the steel industry analyst Wang Hetao and others that the overall improvement in industry profitability behind, there is a greater decline in the prices of raw materials, downstream demand recovery, steel prices cost efficiency three main reasons.
First, the first half of the Iron ore raw material prices, the price of coke year decline of 15%, 18%, steel prices fell more than 6%. At the same time, steel prices have started reducing efficiency, downsizing and other reform measures to limit production, dramatically reducing the cost of steel production, steel prices to earnings provide a relaxed space.
Second, the recovery in downstream demand side of the warming is driven by sales of steel. Among them, the real estate investment growth quickly rebounded since bottoming out late last year, investment in the first half of the cumulative growth rate of 6.10 percent, 4.60 percent compared to the same period last year, an improvement; steady growth of investment in infrastructure as government measures to hedge the economic downturn, increase investment this year Super steady upward overall remain high in June year on year growth before investing a total of up to 20.31%.
"My steel net", a senior industry analyst Xu Xiangchun to the 21st Century Business Herald reporter said that from another point of view, also shows that the first half of the steel industry to resolve the overcapacity has played a certain effect.
Earlier this year, the State Council issued the steel and coal industry to resolve excess capacity "guidance," clearly put forward to resolve the 100 million Chinese - 1.5 one hundred million tons of crude steel production capacity within three to five years. To properly solve the capacity to process surplus personnel placement and other issues, the State of the steel and coal industry to set up a production capacity of 100 billion yuan of special awards and subsidies.
In the context of the supply-side reforms, even governments have introduced over the coming months to capacity planning. As planned, in 2016 reduced the country's crude steel production of 45 million tons for the task. According to official statistics, as of July this year, the country's steel production totaled 21.26 million tons reduced pressure, completed 47% of the annual task.
"The second half, to process iron and steel industry production capacity will continue to accelerate." Xu Xiangchun, as of the end of August, a total of 23 national provinces (municipalities) has announced to production programs. Among them, 22 provinces and cities this year identified specific goals to capacity, iron and steel production capacity reached 37.87 million tons, respectively, and 72.07 million tons, has gone far beyond the country's full-year target to above 45 million tons of production capacity.
"From the data released by the provinces, the total number of crude steel production capacity to present the country has listed it reached nearly 80 million tons, not surprisingly, we progress to the steel industry production capacity can remain optimistic expectations," said Xu Xiangchun, "even completed only 60 million tons, this year will also exceed the annual target to produce energy. "
Xu Xiangchun also expects the second half, due to the relatively stable market supply and demand ends, steel price trend will be more robust than the first half, "easy up than going down, it is difficult rose fell."
In order to speed up the production schedule in the second half, the State Department has sent 10 inspection teams to the country in late August, the deployment of special inspection to resolve excess capacity. For now, Zhejiang, Jiangxi and other regions has been completed ahead of the annual task; to the capacity of Hebei province have been out of the list of publicity, to 18.4 million tons iron production capacity and 16 million tons iron production capacity, it plans to complete in November.
Reorganization and integration will become the hot spot in the second half
Although the annual production capacity to the task of showing optimism in the industry, but that does not mean the capacity to process smooth, overnight.
Wang Hetao Changjiang Securities in a research report stressed that "after all, because the steel industry employment accounted for, the output value and tax contributions and other factors prominent local functional properties is relatively strong, and finally actual reform of the relatively limited capacity to produce," In addition, together with the "already removed steel production capacity in part invalid, or deducted capacity replacement factor" to the second half of the capacity of the process is probably still "difficult to put on hold."
In addition to local employment and tax factors, the capacity to put in another mountain that is in front of the huge debt of state-owned steel enterprises in the body.
September 7, Dongbei occur within six months of the eighth bond defaults, according to statistics the amount of eight lots of defaulted bonds involving a total of 3.688 billion yuan. Dongbei Special Steel 2015 audit report, the first quarter of 2016 annual financial report and the 2016 semi-annual financial reports were released.
CDB and financial data disclosure, as of the end of September 2015, total assets of 52.726 billion yuan Northeast Special Steel, total liabilities amounted to 44.473 billion yuan, asset-liability ratio 84.35%, face greater liquidity pressure.
At press time ago, the major shareholder in Liaoning Northeast Special Steel SASAC on how to pay claims and disposal matters, has not yet announced any clear program and argument.
In fact, just northeast of the domestic steel industry steel deep debt trap tip of the iceberg.
According to CISA statistics, as of the end of 2015, China Steel Association statistics included one hundred and medium-sized steel enterprises on average assets and liabilities was 70.06%, up 1.55 percentage points, the total size of the debt amounted to 3.27 trillion yuan.
Steel Association vice president, metallurgy Planning Research Institute Li Chong told the 21st Century Business Herald reporter said that the debt problems of the steel industry to the production capacity, to leverage one of the core issues. If you can properly resolve the debt predicament effective domestic majority state-owned steel enterprises, will be a strong impetus to resolve the overcapacity in the steel industry in the process.
Li Chong stressed in an interview earlier in the tide of supply side reforms in the past fiscal reveal all the details, with or without "blood" of state-owned treatment model has been difficult to sustain. In the process of production capacity to the market should be allowed to become the dominant force, through mergers and acquisitions, eliminate backward production capacity and other means of survival of the fittest. Through mergers and acquisitions integration, can further enhance the industrial concentration, optimize the industrial structure, and ultimately the transformation and upgrading of the entire steel industry.
The end of June this year, Baosteel and Wuhan Iron and Steel Group's two giant will be the message from the strategic restructuring rumors into reality. Two Group listed company Baosteel and Wuhan Steel shares are suspended from June 27. This is also in the Chinese steel industry in recent years, the largest recombination events.
Data show that in 2015 crude steel output of Baosteel Group 34.938 million tons, Wuhan Iron and Steel production was 25.776 million tons, the two together after production was 60.714 million tons. After the reorganization will have a giant blast furnace 61, converter furnace 62, involving more than 80 million tons of production capacity, hot pursuit of the world's top-ranked Arcelor Mittal, which in 2015 crude steel production was 97.136 million tons.
But the two Big Mac integration is not easy. August 27, Baosteel and Wuhan Steel shares then issued suspension notice, which is both the third consecutive month suspension. The reason for the continued suspension, the announcement said, "Because of this significant asset restructuring matters involved quite complex, time-consuming, the parties still need for further planning, reasoning and communication on this significant asset restructuring-related matters, and the present the major asset restructuring must obtain state-owned assets supervision and administration departments and other relevant departments of the pre-approval of the views. "
Prior to the announcement has revealed that this restructuring relates to assets totaling 738.2 billion yuan, 21.7 million workers. Annual sales revenue of the two companies is about 328.2 billion yuan.
September 9 evening, Baosteel issued "significant progress in asset restructuring announcement," said, "the initial intention of this major asset restructuring of the underlying asset for the steel industry assets, the scope has not been finalized; this major asset restructuring transactions under discussion, argument, not yet finalized, is not expected to lead to the final change in corporate control. "
Xu Xiangchun that continued suspension means that the original will be introduced August 27 restructuring plan will be postponed to September 27 to baked. He stressed that the restructuring plan is delayed sometime, if implemented smoothly for the next local steel prices further mergers and restructuring will also serve as a model.
"I believe the second half, with the deepening of reform and supply-side capacity to process mergers and acquisitions of local domestic steel prices will also have been kicked off a new round of consolidation in the steel industry restructuring in the second half will also become much investment capital market were the focus of attention. "said Xu Xiangchun.