The hottest demand is relatively prosperous as a w

2022-08-04
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The overall demand is relatively prosperous. The iron and steel industry has entered the year of capacity reduction. In 2016, China took the supply side structural reform as the main line, maintained steady and healthy economic and social development, and achieved a good start in the 13th five year plan. Changes in China's economic environment have continued to have an impact on the iron and steel industry. In 2016, the iron and steel industry continued to carry out capacity reduction, steel prices fluctuated significantly, the operating conditions of iron and steel enterprises generally improved, and the profitability was significantly improved

2017 is the year of deepening the supply side structural reform, and it is also a crucial year for the iron and steel industry to reduce production capacity, which has developed to the stage of removing effective production capacity. China will more strictly control new production capacity, more resolutely eliminate backward production capacity, and more severely crack down on violations of laws and regulations. The order of the steel industry will continue to be standardized, the operating efficiency will be significantly improved, and the overall supply and demand of steel will become more balanced. However, there will be serious differentiation among different regions, different varieties and different enterprises. For example, the differentiation trend of "strong strip and weak long wood" will become more obvious

supply side reform has become the main line of the market

2016, with the implementation of policies such as de capacity, China's iron and steel industry ended the five-year continuous shock decline during the "12th Five Year Plan" period and entered the shock upward channel. The steel market has walked out of the situation of "sharp rise - sharp fall - shock rise - weak correction", and the price before fluctuation exceeded expectations. Affected by the continuous rebound of steel prices and the increasing enthusiasm of steel enterprises, China's steel output has shown a slight rise. Among them, the national output of crude steel is 808 million tons, pig iron is 701 million tons, and steel is 1137 million tons. The national apparent consumption of steel is 709 million tons, a slight increase of 2% over the same period

the supply side reform became the main line of the steel market in 2016. Each price rise focused on capacity reduction, production restriction, raw material supply, etc., and the demand side had a weak impact on the steel market. The elimination of the medium frequency furnace and its in-process "ground bar steel" by the state has triggered a periodic surge in steel prices, which has become a "catalyst" for the rise of steel price fluctuations. Due to the increase in steel demand, the market price and profit have rebounded, but they are still at a low and medium level. The sharp increase in the proportion of raw material costs has eroded the profits of iron and steel enterprises. In 2016, the Ministry of transport and the Ministry of public security increased the logistics transportation cost of the iron and steel industry by more than 30% through the implementation of new transportation standards and the strict control of overload, and the transportation cost in some regions increased by 80%

2016 saw a sharp rise in the price of iron and steel raw materials in China. As of December 30, the price of 66% grade dry base iron concentrate in Tangshan was 725 yuan/ton, up 305 yuan or 72.6% from the beginning of 2016. In terms of imported iron ore, the market price of 61.5% fine ore in Rizhao port of Australia was 622 yuan/ton, an increase of 297 yuan/ton or 91.4% over the beginning of 2016

driven by the sharp rise in steel prices, the profitability of China's iron and steel enterprises has improved significantly since 2016. Especially when the steel price rose significantly from March to April, the profitability of many steel mills reached 700~800 yuan/ton, the profits of some enterprises with good cost control even exceeded 1000 yuan/ton, and the total profit of the steel industry was 36 billion to 40 billion yuan

2016 saw a high incidence of trade frictions in China's iron and steel industry. In addition to the 337 investigation, anti-dumping, countervailing and safeguard measures investigations continued to be carried out on China's iron and steel products

according to the monitoring data, in 2016, China's steel exports suffered 48 trade remedy investigations initiated by 20 countries and regions, including 32 anti-dumping cases, 9 countervailing cases and 7 safeguard measures cases. Compared with 2015, the number of countries increased by 6, and the number of cases increased by 29.7%. In 2016, China's steel exports fell year-on-year, with 108million tons of exported steel, a year-on-year decrease of 3.5%, and 1.024 billion tons of imported iron ore, a year-on-year increase of 7.5%

In February 2016, the State Council issued No. 6 document on the opinions on the iron and steel industry to eliminate excess capacity by pressing the loading, shutdown and unloading buttons to carry out trial operation and realize the development of poverty relief, specifying that it would take five years to resolve the excess capacity of 100million to 150million tons of iron and steel. With the issuance of the measures for the administration of special awards and subsidies for the structural adjustment of industrial enterprises by the Ministry of Finance on May 18, the eight matching policies and the overall implementation plan related to the incentive and subsidy funds, fiscal and tax support, financial support, employee resettlement, land, environmental protection, quality and safety for resolving excess capacity in iron and steel and coal have been issued, and the de capacity of the iron and steel industry has entered the full implementation period, All provinces and cities have successively announced their own targets for resolving excess capacity. According to the monitoring data, 27 provinces, municipalities and autonomous regions in China and the three central enterprises of Baosteel, WISCO and Angang Steel announced a capacity reduction target of more than 90million tons in 2016, twice the national capacity reduction target of 45million tons in 2016

2016, the State Council and major ministries and commissions actively carried out environmental protection inspection and de capacity supervision. The Ministry of industry and information technology and the national development and Reform Commission, together with relevant departments, jointly carried out three special actions to eliminate backward and illegal construction projects and joint law enforcement, led teams to local areas to carry out special supervision, acceptance and random inspection and research, and seriously dealt with a number of illegal enterprises. In the first 11 months, only the environmental protection system of Jiangsu Province filed 9072 cases of environmental violations, fined a total of 630million yuan, investigated 2287 cases of environmental violations with the four supporting measures of the new environmental protection law, and the public security organs filed 229 cases of environmental pollution crimes. By the end of October, China had completed the annual task of 45million tons of iron and steel capacity reduction ahead of schedule, which has effectively promoted the recovery of the benefits of the iron and steel industry and the improvement of quality and efficiency, and the confidence of enterprises and society has been growing

pay more attention to the improvement of quality and efficiency

2017, it is expected that China's infrastructure investment will still maintain a high growth rate, the overall demand for steel is still relatively prosperous, and the contradiction between supply and demand in the steel market will not be significantly intensified. According to the analysis of zhuochuang information, the main reasons affecting the steel market trend in 2017 are as follows: first, environmental protection and de capacity will continue to affect the market. In the future, environmental protection will become more stringent, and the impact on the market will continue. Among them, the medium frequency furnace capacity removal launched in the fourth quarter of 2016 will have a greater impact on the market at the beginning of the year. The supply of rebar may be strained due to the withdrawal of small and medium-sized brands. Second, infrastructure factors support the strengthening of steel prices. At present, a large number of infrastructure construction projects are still being approved in China. The increase in the sales of construction machinery in recent months clearly indicates that the infrastructure will continue to show an incremental trend in the future. The new US President trump has taken measures to strengthen infrastructure. If the infrastructure between China and the United States resonates, it will greatly support the emergence of Japan around 1969 in 2017. Third, the current global economy is still in recession. Although asset prices have risen sharply under monetary stimulus, asset foam are also growing rapidly and risks are accumulating

facts have proved that strong policy stimulus is unsustainable, so it is not ruled out that it is possible to return to the bottom in the second half of 2017. However, China's economy will continue to further promote the "three deregulations, one reduction and one compensation", actively seek new growth momentum, and pay more attention to the improvement of quality and efficiency

for China's iron and steel industry, 2017 is an important year for the full implementation of the 13th five year plan. The iron and steel industry will further reduce production capacity, and the relationship between supply and demand will continue to improve. From the perspective of the fundamentals of the iron and steel industry, the supply side reform will continue to be promoted. From the perspective of the objectives of various regions, the total target of crude steel capacity reduction in 2017 is about 50million tons. In addition, the state has vigorously promoted the capacity reduction of medium frequency furnace. It is expected that the steel industry will realize the real capacity reduction from the capacity reduction in 2016 in 2017, and the decline in output will be a high probability event. From the demand side, the steel demand of the real estate industry will be weakened due to the wide-ranging restart of the regulation of real estate purchase restriction. However, during the "13th five year plan" period, China will increase the proportion of steel used for building steel structures, accelerate the construction of urban underground pipes 2, bearings at the upper and lower ends of the lead screw, and accelerate PPP infrastructure projects. The promotion of infrastructure construction will drive a moderate recovery in the manufacturing industry, and private investment is expected to continue to stabilize and rebound, which will help to stimulate steel consumption. Among them, machinery, automobile and other industries still have growth momentum

in terms of steel exports, on December 23, 2016, the Tariff Commission of the State Council issued the 2017 tariff adjustment plan, which reduced the export tariffs of billets, ingots and some ferroalloys, which was good for steel exports, while the decline of the RMB exchange rate provided a favorable competitive advantage for steel exports. At the same time, the promotion of China's "the Belt and Road" construction will effectively stimulate the direct or indirect export of China's steel products. Supported by the above factors, it is estimated that China's steel exports will still exceed 100 million tons in 2017. In terms of price, the steel price has risen significantly in 2017. It is expected that the domestic steel price will show a trend from high to low. It is expected to reach a new high in recent three years from March to April, and then the annual level adjustment will be carried out. In the second half of the year, it will show a downward trend. However, in the long term, the current steel price level is still in a relatively low region. It is expected that the steel price will still have a good upward basis in 2017. The price of the whole year shows a bottom rising trend, and the increase may exceed that of 2016. (wangyuecong and youjianping)

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