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Steel prices generally improved business conditions to resolve the excess of production capacity will increase

Metallurgical Industry Planning and Research Institute at the Chinese Society for Metals recently co-hosted the 2016 (fifth) China's iron and steel high-end technical and economic forum, deputy secretary general of China Iron and China Hot Dipped Galvanized Steel Sheet Association Qu Xiuli, said the steel industry resolve the excess of production capacity will increase market supply and demand will be further improved. The current social stock, business inventories are low, iron ore, coal prices rose slightly in the formation of the cost of support, help stabilize the steel market, the industry is expected to remain profitable situation.
Steel market rebound
Secretary-General of Chinese Society for Metals Zhao Pei said in July before the steel business conditions generally improved, China Iron and Steel Industry Association sales revenue totaled 1.5 trillion yuan, down 11.91%, but the profit of 16.3 billion yuan.
"With the steel market, and the strong price recovery and business cost efficiency and significant reduction of steel this year, losses, loss of face." Qu Xiuli said steelmakers are month by month improvement in efficiency, achieve profitable month in March, realized in May accumulated earnings, and gradually achieve profitability. Among them, steel prices rise, sales decline reduced, cost reduction is greater than the magnitude of the fall in income, especially the cost reduction of financial costs, before the performance of steel companies in July mainly due to losses.
In addition, this year the steel industry has achieved some success in terms of green development, the total energy consumption of the steel industry, the total amount of waste water efflux decreased by 3.12% and 3.33%, respectively, and the utilization of blast furnace slag waste gas utilization to increase slightly.
Qu Xiuli said the steel industry this year is expected to exceed the market situation, production is relatively stable, steel prices rebounded significantly improved business efficiency, but the operating pressure is still large. Late economy is expected to maintain steady growth, overcapacity in the steel industry to resolve the degree of capacity will increase market supply and demand will be further improved.
She noted that, should pay attention to three aspects: First, to control production price stability. 1--7 year, the national crude steel production fell only 0.5%, has increased for five consecutive months, the demand side is relatively stable this year, even more severe export situation, production control is the key to stabilizing the market. Followed by the reduction of debt, risk prevention. Current industry asset-liability ratio of nearly 70%, higher than the industrial sector (56.4%) of the level of current ratio, quick ratio is low, corporate debt burden, weak liquidity, some companies have a debt default. The third should increase efficiency and reduce costs. Improved efficiency of the sector this year, prices rise at the same time, the cost of a larger decline. 1--7 sales in January profit margin is only 1.08%, still at a low level of industrial sectors. Should control the raw materials and fuel procurement costs, strong energy conservation, improve product value.
Intelligent Manufacturing will become the trend
Although the profitability of the industry has gone up, but the market demand has not significantly improved. Zhao Pei said that since the beginning of the monthly crude steel apparent consumption of the overall decline in the interval, in July steel consumption fell 3.6%.
Metallurgical Industry Planning Research Institute Li Chong expected, with the sharp decline in steel consumption in China, the other emerging countries, India's steel consumption will grow as the representative of Asia, but consumption continued to drop throughout the region, 2020 Asian steel consumption was 9.4 million tonnes, down 40 million tons more than in 2015; by 2030 consumption will continue to decline to 8.9 million tons, 44.5 million tons continued to decline. Steel consumption increases and other parts of the drop, but little change in total consumption.
Li Chong believes that China's crude steel production has been in a downward arc peak zone, medium to long term, showing a "downward spiral arc +" trend, but does not rule out fluctuations in individual years of recovery. Pig iron production showed the same characteristics, and with the gradual increase in the amount of scrap, pig iron production over a long period of decline in average speed faster than crude steel. From the perspective of a long cycle, coke, iron ore demand into the turning point in the downstream channel.
Li Chong said personalized, customized, multi-species, small quantities of iron and steel production is the trend of the organization. The intelligent manufacturing steel production model from mass production into mass customization. On the one hand, to accelerate the transformation and upgrading of the steel industry, leading to high-end steel products development; on the other hand, can significantly enhance the quality and efficiency of enterprise development.

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