Since the end of May, the state has successively introduced various measures to stabilize growth, but this has not changed the weakness of the steel market. Recently, the three major steel mills, including Baosteel, WISCO and Angang, all lowered their ex factory prices in July, with a maximum range of 300 yuan/ton
the fact that steel prices are not "cold" for "stable growth" also shows that the steel industry cannot wait for national policy support to get rid of difficulties. We should take advantage of the market downturn to force the industry to carry out deep-seated structural adjustment
"three major steel" cut prices together
among the three major steel mills, Baosteel's action is representative. In the recently released price policy, the ex factory price of Baosteel's mainstream products in July was generally reduced by 200-300 yuan/ton, which was the first time this year. WISCO and Angang followed, with ex factory prices falling by 150-300 yuan/ton and 130-300 yuan/ton respectively
analysts believe that Baosteel's price reduction has the nature of covering the decline. According to its monitoring, the domestic steel market entered the decline channel from the middle of April, and the quotation of deformed steel bar fell from 4 contacts: donglingyang 13718204214/Fax: 010 (6) 866 yuan/ton to the current 4030 yuan/ton, with a decrease of 250 yuan/ton. During this period, Baosteel opened flat for three consecutive months, resulting in an inversion between the ex factory price and the market price. The price reduction is a revision of the previous policy
analysts said that the recent poor performance of downstream demand for steel is also one of the reasons for the price reduction. According to experience, July and August are the traditional off-season of production in automobile and other manufacturing industries, and it will be more difficult for steel mills to organize contracts. In addition, the ore purchase of large steel mills is mainly based on the quarterly pricing model, while the ore price in the second quarter is generally downward, that is, the production cost will decline in the third quarter, which also opens a certain downward space for steel prices
steel export is one of the few areas that exceeded expectations this year. In the context of the deepening European debt crisis and the slowdown of economic growth in emerging market countries, China exported 22.04 million tons of steel in the first may of this year, an increase of 10.1% year-on-year, which played a filling role in domestic demand. However, analysts pointed out that there are also unfavorable factors: South Korea and India, China's traditional two major steel exporters, have developed rapidly in recent years, and their demand for imports has gradually weakened. In addition, China's steel exports mainly rely on the low price strategy, which needs to change to high value-added in the future
it is difficult for enterprises to improve their profits for the time being
although the state has successively introduced various "steady growth" measures since the end of May, its real implementation will take twoorthree months. Zhou Guoquan, vice president of Jiangsu Zhongtian iron and Steel Group, said, "now we can only say that the sales volume and price of steel have stabilized and have not continued to fall, but we have not seen a big rebound."
due to the sluggish demand and price, the profitability of steel enterprises this year is very poor. The sales profit margin of large and medium-sized steel enterprises in April was only 0.1%, a sharp decline from 2.4% last year, and continued to be at the bottom of the industry
Zhou Guoquan Anhui Yuantong water treatment equipment Co., Ltd. won the title of Anhui famous brand and said, "although the recent situation has improved a little, the gross profit per ton of rebar is only oneortwo hundred yuan. After accounting expenses and other expenses are taken out, it is basically a break even. The gross profit space of Youte steel is about twoorthree yuan. After taking out the intermediate expenses, it is only to earn depreciation."
in the face of such difficulties, Zhongtian Steel's approach is to carefully control the purchase of raw materials. "In previous years, there were iron ore inventories that were available for three months and could be dynamically switched in real-time graphics during the test. This year, there is only one month.". Affected by the plight of the steel industry, iron ore, which was as powerful as a rainbow in previous years, can only maintain a narrow fluctuation pattern this year, and is currently hovering at $140. BHP Billiton, a mining giant, recently announced that it would suspend its $80billion investment plan, which also shows its concern about China's demand
Zhou Guoquan is looking forward to the situation in the second half of 2017. First, with the commencement of projects, demand will rebound