China's steel industry will face greater difficulties

Zhang Changfu, vice president of the China Iron and Steel Association, recently stated at a regular information meeting that due to the further slowdown in the growth of steel production, the more prominent product structural conflicts, the greater financial pressure on companies, and the continued high cost of production, etc., In the second half of this year, the operation of China's steel industry will face greater difficulties.

According to the latest data, in the first half of this year, the Chinese steel industry continued to maintain a relatively rapid development, and its crude steel production reached 350 million tons, an increase of 9.6%. However, due to the sharp rise in the price of imported iron ore, resulting in more difficult production and operation of enterprises, iron and steel enterprises are still in a state of low efficiency. For the member companies included in the statistics of the Association, the profit margin in the first half of the year was only 3.14%, down by 0.4 percentage points year-on-year.

According to customs statistics, the average cif price of imported iron ore in the first half of the year was US$160.89 per ton, which was the highest level in history. It was up 47.92 US dollars per ton from the same period of last year, an increase of 42.41%. In the first half of the year, 33.425 million tons of iron ore was imported, and due to the sharp increase in import prices, the government spent more than US$1.601726 billion. According to the average exchange rate of *** against the US dollar in the first half of the year, the cost of the steel industry increased by 104.11 billion yuan***.

At the same time, factors such as coal and electricity also have an impact on steel production. In order to ease the power shortage, the government has raised the price of electricity sold by thermal power companies in 15 provinces (cities) such as Shanxi. In the future, it will also introduce new pricing mechanisms for refined oil products, as well as price reforms for resource products such as ladder electricity prices, and natural gas prices will also increase. Increased. From the above situation, the trend of high production costs for iron and steel enterprises is difficult to change in the short term.

Zhang Changfu said that in the first half of this year, the apparent consumption of medium-thick and heavy steel strips only increased by 3.7%, while bar and steel bars respectively reached 11.4% and 15.2%. Under the circumstances that the original and fuel prices rose sharply, the prices of plate and hot rolled coils rose not only, but were even lower than the rebar prices during the same period. At the same time, steel exports showed a monthly declining trend after March. In the first half of the year, net exports of crude steel equivalent only increased by 1.09 million tons, only an increase of 6.8%. Due to the large-scale construction of affordable housing in the second half of the year and the implementation of the spirit of the Central Water Conservancy Work Conference, the construction of large-scale hydraulic projects will also be carried out in succession, and the market demand for construction steel products will be relatively strong. The growth of shipbuilding, automobiles, construction machinery, etc. will slow down, and the structural contradiction of products will become more prominent. The overcapacity of plate and strip and the homogenization of products will be fiercer. Therefore, the growth of steel production in the second half of the year may slow down.

According to the statistics of the China Iron and Steel Association, the financial expenses of large and medium-sized steel companies in the first half of the year increased by 33.79% year-on-year. If the liquidity of the market in the later period is further weakened, the situation facing the enterprises will be even more severe.

At the press conference, Zhang Changfu also announced that the “China Iron Ore Price Index” (hereinafter referred to as the index) prepared by China Iron and Steel Association will be put into trial operation in August and officially launched in October. The index will be announced on a weekly basis. According to reports, the index includes two sub-indexes, the "domestic iron ore price index" and the "imported iron ore price index." The "domestic iron ore price index" takes the price of dry-base iron fines in 14 provinces, districts and cities and 32 mining areas as the calculation basis; the "imported iron ore price index" will be related to the members of the China Steel Association and Minmetals Chamber of Commerce. The data is based on, and refers to the trading prices of imported iron ore market in eight domestic ports. After the above two indexes were weighted, they were given the "China Iron Ore Price Index."

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