Tuesday, February 3, 2015

How the "along the way" production relocation alleviate the problem of steel over capacity

Steel Association released data show that medium-sized steel companies profit margin was 0.85%, an increase of 0.26 percentage points; face up to 14.77% cumulative losses, down 4.55 percentage points; losses of 11.747 billion yuan, down 8.02 percent. CISA vice chairman Zhu Jimin said the loss of large losses top 10 industry accounted for 97.5 percent of losses. Judging from the composition of the profits, steel main business remained profitable, but with low level of profitability.
Digestive capacity depending on the "along the way"
According to CISA data, in 2014 the country exported steel 93.78 million tons, an increase of 50.5%; steel imports 14.43 million tons, an increase of 2.5%; equivalent to approximately 84.41 million tons of crude steel net exports, an increase of about 33.08 million tons during the same period China's crude steel production increased by approximately 7.34 million tons.
Since the 1949, China's total imports of 594 million tons of steel, 596 million tons of steel exports. By the end of 2014, total export exceeds imports of steel. A substantial increase in steel exports, a frequent consequence is the emergence of trade friction.
Domestic and foreign steel is an important reason for the spread increase in exports of steel products in 2014. Since entering 2015, steel price index fell slightly trend continues, the second week of the steel composite price index fell to 80.3 points in January, sustained lows. However, domestic steel production capacity including seamless steel pipe and welded steel pipe is still excess capacity, How the "along the way" production relocation can alleviate this problem? We’ll see.

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