Friday, July 11, 2014

Steel industry development in 2014

It is said that the steel industry has only just entering the winter, in the cold pressing of the environment, steel production accounted for 7.5% of the steel industry and naturally can not be spared. 2013, China's steel industry is still suffering from overcapacity, disorderly competition, torture and other diseases run profit. Branch in China Steel Pipe Association recently held its sixth meeting secondary members, steel branch chairman Li Qiang bluntly, the domestic steel production release faster, domestic production continued to show oversupply last year, steel prices up and low down run, industry profitability is still at a low level.

According to preliminary statistics, China has formed steel production close to 108 million tons, of which the production of seamless and welded steel pipe can be close to 43 million tons, respectively, and 65 million tons. 2013, China's steel production was 79.79 million tons, an increase of 5.686 million tons, an increase of 7.67 percent, down 0.79 percentage points from the growth rate over the previous year. Same period, the apparent consumption of steel was 71.208 million tons, an increase of 5.54 million tons, an increase of 8.44 percent, down 0.23 percentage points from growth. And an incentive overcapacity in steel industry concentration is low. According to statistics, China's seamless pipe production in the top 10 companies, and its production accounts for about 40 percent of the total production of seamless steel tubes; welded steel output of the top 10 companies, accounting for its production of welded steel and the total 20% yield. "Under the strict control of new capacity, expedite restructuring of steel enterprises, is the only way to improve the degree of concentration of seamless steel industry." Li Qiang think, according to the "steel industry" second five "development plan" 2015, for the top ten of seamless steel pipe production enterprises and 70% of the total production of seamless steel tubes. Which, for those who do not have the tube and strip (volume) of the company, should pay attention to the production of raw materials and steel enterprise restructuring, in order to obtain a stable tube and strip (volume) resources. This will not only facilitate the development of steel variety, improve product quality and ensure delivery, and can reduce steel production costs, enhance core competitiveness of enterprises.

Under low concentration of excess, will inevitably lead to business efficiency "shabby." Into the Lunar Year of the Horse, steel market did not "immediately brought the matter", steel prices did not "immediately bounce", but all the way down. As of mid-March, steel price index has dropped 89.11 points, the lowest price of all varieties of steel. "Space steel enterprise survival and development is undergoing a severe test of the steel industry is currently faced with an embarrassing situation: a leading technology and equipment, the production scale, product self-sufficiency rate, coverage expanded, industries are losing money, and a serious decline in the level of corporate profits.

The domestic market, "low-end" dogfight, China's steel exports have suffered a lot of obstacles. In recent years, China's steel products experienced foreign trade friction cases continue to increase, in addition to Europe and other developed countries, emerging countries and third world countries have started to implement the steel pipe from China's "double reverse" investigation. Earlier this year, the Eurasian Economic Committee intends to Chinese seamless OCTG countervailing investigation, prosecution and Russia TMK OMK Group. In addition, with Mittal, TMK production plant in Saudi Arabia, the Middle East, or will Chinese steel products as a "dual" goal, China's steel export outlook is not optimistic. It is worth mentioning that in 2013, China's steel export price of $ 1,209 / ton, steel import price at $ 4,006 / ton; although the import and export price has declined, but the average import price of steel exports are still 3.31 times the price, the average price difference of $ 2,797 / ton.

Due to the world for the revitalization of the national economy, protect local businesses and promote employment, constantly resorted to trade protectionism banner, the difficulty of increasing steel exports. 2013 net export volume of steel was 8.58 million tons, an increase of 1.68 percent, down 5.16 percentage points from growth. This is our country since 2003 to become a net exporter of steel since the first export volume increased slightly but the growth slowdown appears. 2014 will be more in the future will show a normal trend, steel companies must have a full mental preparation and marketing measures, and actively respond to the "double reverse" survey of China's steel products trade friction encountered. The pattern of China's steel industry profit this year, running is still difficult to change. On the one hand, the price of imported iron ore and steel price movements showed asymmetrical running posture, namely steel prices, with ore prices rose; However, when steel prices, ore prices only fell behind, and the decline is relatively small. Expects iron ore prices are still high, and showed soaring trend of slow down, so that weak steel prices rebound. On the other hand, with the national increase energy conservation efforts, resources, energy, environment and transportation prices, fiscal reforms accelerated, steel production costs will be further enhanced.

It is foreseeable that in the operating profit of the situation, the steel industry transformation and upgrading, will accelerate the pace of structural adjustment. Upgrade and change First, resolve excess capacity, improve quality and efficiency. With the gradual slowdown in China's economic growth rate, the demand for steel market growth will be slowed, steel market will be long-term in a situation of oversupply, and resolve conflicts pipe serious excess capacity, must take positive and effective measures to seriously implement the "group of four" requirements, to promote enterprise development mode transformation, turning variety, quality and efficiency from economies of scale, improve the quality of enterprise reform and innovation through the country. Second, identify the product positioning, expand competitive advantage. The current status of the steel industry is a lack of high-end products, the low-end surplus products. For this reason, not only to increase oil production, electric power, aerospace, defense, chemicals, energy, heavy walled structures, machinery and other fields with a special high-end seamless and natural gas project, undersea pipelines, pipelines and other mega projects field seamless steel pipe with a special high-end research and development efforts; imported products also aim at "replacement" of product development. Third, speed up environmental governance, to achieve green development. Steel industry must accelerate backward, strict implementation of environment standards, and strengthen environmental protection and other legal constraints, and actively develop recycling economy, low carbon development. Finally, even with their own advantages, do the fine steel main industry, the scientific development of non-steel industry, and to speed up the "going out" pace of implementation of international strategy layout.

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