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Steel industry development analysis


From January to September 2013, large and medium-sized steel enterprises achieved cumulative sales revenue decreased by 6.49% compared with the same period last year, according to a steel industry operation report released by the China Iron and Steel Association on Wednesday. The loss of loss-making enterprises reached 26.726 billion yuan, an increase of 41.5 times year-on-year, or 45%. Losses in the steel industry continue to intensify.

China's apparent consumption of crude steel was 510,276,100 tons from January to September 2013, down 9.73 percentage points from the same period, according to the association. In the main steel industry, the investment in railway construction and the investment in real estate development (newly started) all showed negative growth. The total industrial output value (product output) of machinery, automobile and household appliance industries showed weak growth or large decline in growth. The weak situation of steel market demand did not change significantly. And steel prices low operation, high price fluctuation of raw materials, making the enterprise profit space greatly compressed.

Our country is in the late stage of industrialization at the present stage, the demand for iron and steel is huge, and the iron and steel industry is facing the larger market space. As shown in the following chart, both the assets and sales scale of China's iron and steel industry showed steady growth from 2007 to the first half of 2011. In the first half of 2011, the cumulative scale of the iron and steel industry reached 4,864 billion yuan, an increase of 16.41%; The cumulative sales revenue reached 3,270,379 million yuan, a year-on-year growth of 28.96%.

On the one hand, China's steel demand continues to expand, but on the other hand, China's steel companies as a whole are marginally profitable. The decline in average profit margins in the steel industry is mainly due to steel overcapacity and ore price increases.

On March 23, 2010, BHP Billiton reached a quarterly pricing agreement with Japanese steel mills, ending its 40-year long arrangement. Chinese steelmakers have been forced to accept pricing models such as quarterly, monthly and spot pricing, and iron ore prices have been rising. In 2010, the three mines made a combined net profit of $48bn, three and a half times that of China's steel industry.

In the first half of 2011, BHP Billiton, Vale and Rio Tinto posted net profits of $13.1 billion, $13.3 billion and $7.6 billion, respectively -- another bumper year. In the first half of 2011, China's steel industry made a profit of 80.5 billion yuan, according to the National Bureau of Statistics. The former is nearly three times the latter. Chinese steelmakers had to pay $16.017 billion more to import iron ore in the first half of 2011 because of higher prices. China's steelmakers need to move faster away from iron ore. They need to move faster upstream and step up overseas mining development, where companies such as Wuhan Steel and Baosteel have done well.

China's steel overcapacity and unreasonable industrial structure are also the main reasons for the meager profits of the steel industry. During the 12th Five-Year Plan period, the steel industry will eliminate 75 million tons of outdated iron production capacity and 48 million tons of outdated steel production capacity. At the same time, the restructuring and integration of steel enterprises in the region has been upgraded again, and Hebei, Shandong, Guangdong, Liaoning and other regions have formed steel groups within the region.

Technicians expect China's severe iron ore shortage to improve by 2014; At that time, the merger and integration of steel enterprises will also come to an end. It is expected that at the end of the 12th Five-Year Plan, the profitability of China's iron and steel industry will rise as a whole.

On July 28, 2015, China Iron and Steel Association held the third information conference in 2015, at which the development goals of the steel industry during the 13th Five-Year Plan period were passed.

The development goals of the iron and steel industry during the 13th Five-Year Plan period are to resolve overcapacity, carry out large-scale structural restructuring, curb disorderly competition in the industry, increase product innovation, promote green development, and encourage enterprises to go global.

2015 was another difficult year for the steel industry. Oversupply is still a big problem in the industry, steel prices continue to hit new lows. Therefore, in the "13th Five-Year Plan". China Steel Association believes that steel overcapacity will not be eliminated in the short term.

Zhu Jimin, vice president of China Iron and Steel Association, revealed that the "13th Five-Year" steel industry to carry out large-scale structural restructuring. Regional, large special varieties, and corporate structural restructuring. Now the steel industry is too scattered, the industry is not good, blind competition between enterprises, disorderly competition.

Zhu Jimin said that steel industry restructuring is difficult, but also push forward, otherwise the industry will be difficult to get out of the predicament.

At present, China Steel Association has established several industrial technology innovation alliances, steel innovation has achieved some results, but in terms of industrial transformation and upgrading and industrial development needs to be further deepened.

In the next step, the steel industry should rely on the established industrial technology innovation alliance and continue to promote the research and development and application of steel products through the cooperation and collaboration of upstream and downstream industries, focusing on expanding the application range of high-end products, improving the application efficiency of steel products, and promoting the reduction and greening of the full life cycle of steel products.

Keywords: Jiuhuayang Mechanical Equipment

News


The operation of the steel industry

Steel output maintained growth. In October, the output of pig iron, crude steel and steel was 76.17 million tons, 92.2 million tons and 11.48 million tons, respectively, up 9.4 percent, 12.7 percent and 14.2 percent year-on-year. From January to October, the output of pig iron, crude steel and steel stood at 740 million tons, 870 million tons and 1.08 million tons, respectively, up 4.3 percent, 5.5 percent and 6.5 percent year-on-year.


What are the classifications of the steel industry

The main raw materials of iron and steel production include iron ore, manganese ore, chromium ore, limestone, refractory clay, dolomite, siderite and other minerals of raw ore and finished ore, artificial block ore, iron alloy, coal washing, coke, gas and coal chemical products, refractory products, carbon products, etc.


Trends in the steel industry

Output reached a record high level. From January to June 2013, China produced 390 million tons of crude steel, up 7.4% year on year and 5.6 percentage points higher than the same period last year. In the first six months, the average daily crude steel output was 2.154 million tons, equivalent to the annual crude steel output of 786 million tons. Among them, February reached a record high of 2.208 million tons, March to June although there was a decline, but still maintained at a high level of more than 2.1 million tons. From January to June, the crude steel output of Hebei and Jiangsu increased by 6.8% and 13.2% year on year, respectively. The new output of the two provinces accounted for 42.4% of the total increase of 26.94 million tons in China, and Shanxi, Liaoning, Henan and Yunnan provinces also increased by more than 1 million tons. From January to June, crude steel output of large and medium-sized steel enterprises increased by 5.5% year on year, 2 percentage points lower than the national average, but still accounted for 60% of the increase.


Steel industry development analysis

From January to September 2013, large and medium-sized steel enterprises achieved cumulative sales revenue decreased by 6.49% compared with the same period last year, according to a steel industry operation report released by the China Iron and Steel Association on Wednesday. The loss of loss-making enterprises reached 26.726 billion yuan, an increase of 41.5 times year-on-year, or 45%. Losses in the steel industry continue to intensify.


Status quo of iron and steel industry

The iron and steel industry is an industrial industry mainly engaged in ferrous mineral mining, ferrous metal smelting and processing and other industrial production activities, including the mineral mining industry of ferrous iron, chromium, manganese, iron, steel, steel processing industry, iron alloy smelting, steel wire and products industry and other subdivisions, is one of the important raw material industries of the country. In addition, since steel production also involves non-metallic mineral extraction and products and other industrial categories, such as coking, refractories, carbon products, etc., these industrial categories are usually included in the steel industry.