Steel ride "roller coaster" to resolve production capacity "unambiguous"
This year, the performance of the China Prepainted Galvanized Steel Sheet
market has changed over the past four years, the pattern of sustained downturn, the performance is relatively active: first since the beginning of a wave of rising prices, and then the high prices fall. Into the traditional off-season, the steel market is "off-season is not short", usher in a new round of rally. Industry experts believe that the price of steel rose up and down like a "roller coaster." Overall, with the September steel market into the traditional consumption season, coupled with further capacity to implement the policy, steel supply and demand is expected to further improve, steel prices are also expected to show upward trend. However, it is noteworthy that the current monthly crude steel production continued to grow, to resolve the arduous task of excess capacity.
Steel prices rebounded
September 5 to 9, the relevant steel composite price index was 77.26 points, down 0.44 points from last week. However, this wave of weak downstream market, did not affect the trend of this year, steel prices shot up continuously.
Since 2012, subject to overcapacity and other factors, the domestic steel prices all the way down, fell more than 4 years in a row. December 2015, steel composite price index fell to a minimum of 54.48 points, the index is the lowest level since the record, down 34.43% over the end of 2014. This year, steel prices have rebounded, especially after the Spring Festival, steel prices in the process of recovery in a volatile situation, some varieties of prices rose more than expected. To the end of April, the relevant steel composite price index rose to 84.66 points, steel price index for the first time in many years higher than the same period last year.
5,6 month, the steel market has experienced a short period of adjustment, in May the price of steel fell back to the end of June, the relevant steel composite price index fell to 67.83 points, down 4.8% compared with the end of April, but still rose early 20.33%.
"The first half of the sharp fluctuations in steel prices, local supply and improve the market is expected to improve the main reason is that the futures market of steel-related varieties of contract prices also fluctuated significantly.The steel prices to improve the business conditions, ease the industry difficulties, But the volatility of the smooth operation of production and operation at the same time have a great impact. "China Iron and Steel Industry Association, said Ma Guoqiang.
Into July since the steel market once again usher in good market, showing off-season is not short of obvious features. In July, the related steel composite price index was 72.09 points, up 4.26 points, or 6.28%, after the chain for two consecutive months of decline; At the end of August, the steel price index continued to rise in July, steel composite price index was 77.54 points.
Ma Guoqiang said that the second half of the year, China's economy continued to run smoothly, the state increased to resolve the excess steel production capacity, coupled with Tangshan, Hangzhou, limited production measures, as well as heavy rainfall caused by floods in some parts of the domestic steel production chain decline, Short-term improvement in supply and demand contradiction, steel prices by the drop turn up.
Steel prices rebounded this year, and promote the improvement of the effectiveness of iron and steel enterprises. China Iron and Steel Industry Association data show that in the first half, members of iron and steel enterprises to achieve sales revenue 1.29 trillion yuan, down 11.93%; realized profits of 12.587 billion yuan, an increase of 4.27 times the loss of loss-making enterprises fell 22.8% year on year.
Oversupply pattern unchanged
In Ma Guoqiang view, this year, steel prices rebounded, the demand for short-term improvement is only one of the reasons. But on the whole, the iron and steel industry oversupply situation has not changed.
From the production point of view, in the first half, the national crude steel output 400 million tons, down 1.1%. Among them, in March, April, May, June crude steel production for four consecutive months of positive growth in April, June crude steel production has reached a record high, crude steel production release rate also exceeded market expectations. "Despite the continued decline in crude steel production, but the overall supply is still excess." Ma Guoqiang said, from the perspective of market demand, the apparent consumption of crude steel continued to decline, the market demand and no significant improvement.
Data show that since 2014, China's apparent consumption of crude steel began to decline in 2015 apparent consumption of crude steel fell 5.45% year on year. Apparent consumption of crude steel in 2016 continued to show a downward trend, down 2.68% in the first half. Apparent consumption of crude steel from the month of view, in March fell 0.5%, in April fell 0.45%, in May rose 1. 74%, in June fell 1.89% year on year. Apparent consumption of crude steel fell slightly, but the overall decline is still in the range.
"From the performance of both ends of supply and demand, the steel industry since the price fluctuations this year, more because prices fell for four consecutive years, fell too deep, resulting in widespread loss of corporate cut-off, limited production to improve the supply and demand." Ma said, The state has repeatedly made it clear that will not introduce a wide range of stimulus policies, but rather focus on economic restructuring and optimization, so the steel market demand in the new macroeconomic normality will not appear under the substantial growth.
From the second half of the market trend, crude steel production in July increased by 2.6%, an increase of 3.0% in August. From the demand side, as the major downstream steel industry, most of the poor economy, such as machinery, shipbuilding, containers, household appliances and other industries will continue the downward trend in the first half, real estate and automotive industry will maintain a certain growth. Private investment growth is poor so that the role of investment in stimulating economic growth weakened, the only growth is faster infrastructure investment in the second half is expected to continue to maintain rapid growth in demand from the downstream to see the whole in a weak position.
"As the overall market is still showing an oversupply situation, the late steel prices is difficult to rise sharply, will show a narrow range of movements." Ma Guoqiang said.
The task of resolving excess production capacity is arduous
"The first half of the year, the iron and steel industry to improve economic efficiency, is the country to promote the supply side structural reform, and actively resolve the excess steel production capacity of the initial results." Ma Guoqiang said that the first half of the steel industry to profitability, so that enterprises to resolve the excess capacity The necessity and urgency of a more full understanding of the excess capacity through the resolve to promote the transformation of the steel industry to get rid of the effectiveness of the confidence of more firmly.
This reporter has learned that the current number of enterprises are implementing the main responsibility to take the initiative to suppress excess capacity. For example, Baosteel plans to reduce its excess steel production capacity of 9.2 million tons between 2016 and 2018 and has made a solemn commitment to the society. Hegang has already eliminated 5.6 million tons of ironmaking, 6.84 million tons of steelmaking and 2.5 million tons of steel rolling capacity in the early stage. It plans to reduce the iron-smelting capacity by 2.6 million tons in 2016 to 2017 and the steelmaking capacity of 5.02 million tons . Xining special steel in the "equipment, quality, environmental protection, energy consumption, safety," five indicators in full compliance with industry standards, based on the initiative to reduce production capacity of 500,000 tons, to accelerate product restructuring to create new space. Shagang active pressure reduction has a blast furnace, converter, electric furnace, continuous casting, rolled material composition of the joint production line, out of 2.3 million tons of steel, 2.5 million tons of material production capacity.
In addition, Angang, TISCO, Valin, days steel, heavy steel, dedicated, through steel, Kunming Iron and Steel and other enterprises and there are many companies in 2016 will have capacity to exit. It is these enterprises take the initiative to reduce production capacity, adjust the structure, for the development of enterprises has won the opportunity to upgrade, for the steel industry to resolve the excess capacity to contribute.
However, with the rebound in steel prices, many people worry that some companies had removed the production capacity may begin to re-violation of production, affecting production capacity to work forward. Especially in recent months, crude steel production is continuous positive growth, highlighting the task of resolving the excess capacity difficult.
Ma Guoqiang said that the second half of the steel industry to implement this year to resolve excess capacity 45 million tons of the key tasks of the task. Iron and steel enterprises to give full play to the main role, according to their own situation to develop the implementation steps to ensure completion of this year's mission objectives. At the same time, in the implementation process, pay special attention to do a good job training programs, staff placement emergency prevention and emergency response plans to ensure stability; do a good job in debt and debt disposal to ensure that no systematic risk.
National Development and Reform Commission spokesman Zhao Chen Xin said that in order to ensure that the objectives and tasks throughout the year in strict accordance with the progress requirements and time nodes successfully completed, the State Council has started in the country to resolve the excess capacity of iron and steel coal production special supervision. At present, the field inspection work has been completed, the relevant departments are stepping up supervision of the situation summary, and strive through supervision, further compaction of the target responsibility to promote key work to speed up the progress of work to ensure the smooth completion of this year's objectives and tasks.