The price and demand shrink The recent growth of the steel industry
Editor's note: At the beginning of this year, the cold winter of the financial crisis entailed snow and ice, it seems that it has penetrated into every corner of economic life, from the financial sector to the real economy, from rich and wealthy international giants to struggling SMEs, from the financial street From the bright bankers to the migrant workers on the construction site, every economic cell feels the cold of the harsh winter.
However, so far, we have felt the gradual warming of the spring, and felt that the chill of the financial crisis has come back in the slightest, just as we felt about the operating conditions of the industrial economy in the first quarter. We firmly believe that Chinese industries that have undergone the financial crisis will rely on good economic fundamentals, and with confidence and ease, they will be the first to disperse the cold in the world.
In order to understand the operational status of China's industrial economy and explore the countermeasures for the financial crisis, the China Industry News held the first quarter of 2009, China's Industrial Industry Operations Association, on April 29. People from the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Commerce, and key industry associations analyzed the cooling and heating of the industrial economy in the first quarter of the year, including machinery, steel, petrochemicals, nonferrous metals, textiles, ships, electricity, coal, and building materials. The operating characteristics, existing problems, and development trends of the nine key industries have put forward their own opinions and suggestions. Starting today, this edition will open up a column entitled “Special Report on Industry Operations in the First Quarterâ€, which will report on the progress of the nine major industrial sectors in succession. Please pay attention to readers.
Since the rebound of the comprehensive steel price index in mid-February this year, on March 5, China’s steel prices have fallen back to the lowest point of the previous year, and steel producers have again faced large losses.
According to data from the China Iron and Steel Association (hereinafter referred to as China Iron and Steel Association), 72 large and medium-sized iron and steel enterprises included in the statistics generated sales revenue of 449.95 billion yuan in the first quarter of this year, a year-on-year decrease of 21.74%, and realized profits and taxes of 12.363 billion yuan, a year-on-year decrease of 83.07%; The overall loss of profits was 3.308 billion yuan, which was in sharp contrast to the profit of 44.16 billion yuan in the first quarter of the previous year. In the first quarter, 25 large and medium-sized iron and steel enterprises suffered losses, with a loss of 34.72%, an increase of 23.61 percentage points over the same period of last year. Luo Bingsheng, executive vice chairman of China Iron and Steel Association, believes that it is not yet possible to judge whether the economy has recovered. Although car consumption has rebounded in the first quarter, this is mainly affected by the sales policy of small-displacement cars, and sales of some large trucks are still declining. . He said: “In some areas, there have been positive changes, indicating that the central policy has achieved initial results, but there has been no major change in the consumption of the real estate industry that has the greatest impact on steel consumption.†On the whole, there is no shrinking demand in the domestic market. To improve, steel prices in the domestic market are still consolidating at low levels.
According to the relevant person of China United Iron and Steel Network, the current trend of China's steel industry can be described as: the foundation for recovery is still not stable, the internal and external environment is still very severe; the international financial crisis is still spreading, and the impact on China's steel industry is also In the process of deepening, external demand continues to shrink, and exports have fallen by a large margin; overcapacity in the industry, growth has picked up, and economic efficiency has continued to decline.
A: A slight increase in output in the first quarter became a net importer of steel in March. According to the statistics of the China Iron and Steel Association, the country’s crude steel production in March totaled 4,290.44 million tons, with an average daily production of 1.384 million tons, although it was 4.14% lower than the previous month, but still This is higher than the average daily production of 1.367 million tons last year. In the first quarter, the country’s crude steel production was 127,443,500 tons, an increase of 1,749,200 tons over the same period of last year, an increase of 1.39%; and the production of pig iron was 12,237.58 million tons, an increase of 5.039 million tons over the same period of last year, an increase of 4.29%.
According to the latest customs statistics, from January to March, China exported 5.14 million tons of steel, a decrease of 54.8% year-on-year. Among them, 1.67 million tons of steel was exported in March, an increase of 120,000 tons compared with February, and a year-on-year decrease of 59.76%. The net export of steel products was 400,000 tons, a decrease of 14.89% compared with February; it was a decrease of 2.25 million tons, a year-on-year decrease of 84.91%. From January to March, China's total imports of steel were 3.23 million tons, a year-on-year decrease of 22.5%; cumulative imports of 900,000 tons of steel bills were up 17 times year-on-year. Among them, March steel imports 1.27 million tons, an increase of 16.51% compared with February, a year-on-year decrease of 15.33%. In the same period, China imported a total of 131.47 million tons of iron ore, a year-on-year increase of 18.8%. Among them, the import of iron ore was 52.08 million tons in March, a record high, which was 5.34 million tons more than that in February, an increase of 46.2% year-on-year. From January to March, the total amount of coke exported was 150,000 tons, a year-on-year decrease of 94.88%.
B operational characteristics: prices continue to fall after the protection of foreign trade
China Steel Association data show that at the end of March domestic steel comprehensive price index was 97.59 points, a decrease of 6.1 points, a decrease of 5.88%, an increase of 2.17 percentage points from the previous month; a decrease of 44.72 points, a decrease of 31.42%. At the end of March, the long product price index was 99.47 points, a decrease of 8.18 points, or a decrease of 7.60%. The price index of sheet metal was 97.01 points, a decrease of 5.68 points, a decrease of 5.53%. Compared with the same period of last year, the price of long products and plates fell by 31.81%. And 32.42%. The prices of major steel products all declined in different degrees, among which the decline in hot-rolled sheet and hot-rolled coil decreased compared with the previous month, and the decrease in the price of other types of steel products surpassed that of the previous month. Compared with the previous month, the prices of hot-rolled and hot-rolled coils fell by 122 yuan/ton and 199 yuan/ton respectively, with decreases of 2.88% and 5.26%, respectively, down by 0.82 and 2.95 percentage points from the previous month; The prices of rebar and rebar fell 298 yuan/ton and 269 yuan/ton, respectively, down 8.35% and 7.28% respectively; plate fell 321 yuan/ton, down 7.35%; cold rolled sheet and galvanized sheet fell 4.80, respectively. % and 6.94%; seamless steel pipe prices fell 5.91%.
Since this year, Europe and the United States and other countries and regions have filed anti-dumping and anti-subsidy lawsuits against certain types of steel products in China. On April 8th, seven oil pipe producers in the United States and the U.S. Steel Workers Federation filed anti-dumping and anti-subsidy lawsuits with the US Department of Commerce and the U.S. International Trade Commission on China's export of oil pipes to the United States. According to relevant U.S. laws, the U.S. International Trade Commission will decide whether to file a case within 20 business days of receiving the application. "If the United States finally decides to file a case, it will become the largest anti-dumping case that China's steel companies have encountered," said a related person in the China Iron and Steel Association. It is reported that China Steel Association recently convened major domestic steel export enterprises to discuss how to deal with possible anti-dumping and countervailing lawsuits in the United States. According to relevant sources, once the United States formally files the case, the China Iron and Steel Association will organize domestic steel companies to actively respond.
C: The Seven Problems Constrain Development of Long-term Growth of Steel Consumption
Li Xinchuang, deputy dean of the Metallurgical Industry Planning and Research Institute, recently stated that there are seven major problems in China's steel industry: serious capacity and structural excesses, low levels of iron ore resources and shipping guarantees, and inability to independently innovate. However, China’s status as a global steel production and consumption center and the world’s major steel exporter will not change. Before China’s industrialization, steel consumption will continue to grow.
Specifically, the major problems existing in the current steel industry are: First, there is a serious excess of production capacity and structure, especially large backward production capacity. As of the end of last year, China's crude steel production capacity reached 660 million tons, which exceeded actual demand by about 100 million tons. The second is that the capacity for independent innovation is not strong. The research and development and application of advanced production technologies and high-end products also mainly rely on the introduction and imitation. Some high-grade key steel products still need large amounts of imports, and the consumption structure is in the middle and low grades. Third, the industrial layout is irrational. Most steel companies are distributed in large and medium-sized cities in inland areas. Fourth, the industrial concentration is low, and the average steel production scale of crude steel production enterprises is less than 1 million tons per year. The top five steel producers only account for about 28% of the national total. Fifth, iron ore resources and shipping security are low, and their ability to respond to market changes is weak. Domestic iron ore resources have low endowments and self-sufficiency rate is less than 50%. Sixth, the steel market system is immature, and there are more than 150,000 iron and steel product dealers, and the speculative business tends to be heavier. Seventh, the homogeneity of products is serious, and the degree of product extension and deep processing is low.
Li Xinchuang believes that at least the saturation point of steel needs to meet three conditions: First, to achieve industrialization; Second, per capita GDP reached 3500 to 6000 US dollars; Third, the fundamental changes in the industrial structure, the proportion of the tertiary industry more than 50%. According to this standard, China’s iron and steel industry has a long way to go and there is still room for development.
D Recommendations: Controlling Total Costs, Reducing Costs, and Fundamental Guarantees for Steel Companies to Cope
First of all, to do a good job in total control and substantially reduce the cost of raw material purchases is a fundamental guarantee for iron and steel companies to weather the difficulties. The depth and breadth of the impact of the global financial crisis on the real economy continue to expand. The uncertainties and destabilizing factors in the domestic and international economic situation are still increasing. The developed countries’ economy has entered a recession, and emerging economies have been affected by the global financial crisis. The seriousness of expectations has led to a serious shortage of steel demand.
The key to realizing a rebound in the market price of steel products and a turning point for iron and steel enterprises is to balance production and demand, control production, and purchase costs of raw materials. It is necessary to organize production according to market demand, not blindly increase production and control the company’s reasonable inventory; use advanced products to replace backward products, eliminate backward production capacity through market competition, and establish long-term cooperation and mutual benefit and win-win strategic cooperation with raw material suppliers. Partnerships, vigorously reduce procurement costs and improve the economic efficiency of enterprises.
Second, it is necessary to further expand steel exports and ease the pressure on supply and demand in the domestic market. Since April 1, the export tax rebate rate for some steel products has been adjusted, and the export tax rebate rates for cold rolled coils, galvanized coils, color coated coils, hot rolled alloy steel coils, and stainless steel coils have been 5%. Increased to 13%, which will help companies reduce the cost of steel exports. Iron and steel enterprises should take effective measures to stabilise the international market share and open up new steel export channels and export varieties.
Third, we must earnestly implement the industry self-regulation conventions and standardize the competition in the steel market. Large and medium-sized enterprises should really play a leading role in stabilizing the market, strengthen communication and cooperation with traders and direct users, and jointly safeguard the stability of the steel market. In addition, we must also comply with WTO rules and oppose international trade protectionism and low-cost dumping. Demand for steel has continued to slump, leading to a rise in international trade protectionism. At the same time, the sharp devaluation of currencies in neighboring countries has led to a large increase in imports of steel and billets. In this regard, iron and steel enterprises should actively respond to the competition on the one hand, fair competition, equal dialogue, and mutually beneficial cooperation to participate in international market competition, on the other hand to pick up anti-dumping legal weapons to stop the low-cost dumping of foreign products.
E Forecast: Steel prices remain low and the market may pick up at the end of the second quarter. <br> As the international financial crisis has spread from the financial industry to the automotive and real estate industries, automakers in Europe, America, Japan and South Korea and other countries and regions have announced production cuts, real estate The shrinking market led to a rapid decline in the number of new housing starts. The crisis in the auto market and the housing market has greatly affected the upstream steel industry and the demand has shrunk dramatically. Although various countries in the world have successively introduced measures to stimulate the economy, the signs of economic recession in developed countries are still evident. According to statistics of the World Steel Association, from January to February of this year, the world production of crude steel was 170.268 million tons, a year-on-year decrease of 22.9%. Except for China, in January-February, the world production of crude steel was 88.653 million tons, which was reduced by 36.08% in terms of calendar days compared with the caliber. Among them, North America reduced production by 53%, the EU reduced production by 43%, Japan reduced production by 40.9%, the Commonwealth of Independent States reduced production by 35.5%, and South Korea reduced production by 24.7%. The above situation shows that the impact of the financial crisis on the global economy is still deepening, and the international environment and the situation facing the steel market are not optimistic.
A series of plans for expanding domestic demand and ensuring growth will certainly bring positive changes to China's economic development. With the implementation of the 4 trillion yuan investment plan and the introduction of China's export tax rebate policy for steel products on April 1, the situation of weak demand in the steel market will certainly improve.
At the same time, the price of raw materials fell back, which weakened the supportive role of steel prices in the later period. In March, affected by the continued decline in steel prices, the price of raw materials for steel production fell except for coking coal. Among them, the price of metallurgical coke decreased from 14.8% to 16.4%, while domestic iron concentrate, pig iron and scrap prices fell 10.84%, 8.41% and 12.66% respectively; the spot price of imported iron ore dropped 9.6%; Brazil and Western Australia China's ocean freight prices fell by US$6.45/ton and US$1.94/ton respectively.
On the whole, the recent steel market has both positive and favorable factors for domestic expansion of domestic demand, as well as difficulties in deepening the impact of the global financial crisis and continued weakening of demand. It is expected that the steel market price in the later period will maintain a low level of running and fluctuating slightly. Li Xinchuang believes that the development of China's economy has led to the development of China's steel industry, and that secondary industry consumption has dominated domestic steel consumption, with manufacturing and construction accounting for 38% and 54% of total steel consumption, respectively. According to the development experience of developed countries, the realization of industrialization will consume a lot of steel. Before China realizes industrialization, steel consumption will continue to show a growth trend. Zhou Guocheng, chief advisor of China United Steel Network, said that China's steel market presents an open, multi-channel, multi-level flow pattern. The huge number of steel traders can both amplify market demand and amplify market shrinkage. Steel traders are demanders for steel production companies, but they are suppliers to end users who use steel. The expected price increase will increase the inventory, which will amplify the market demand, while the expected price decrease will reduce the inventory, leading to low-cost selling and amplifying the market. Therefore, it is relatively complicated to determine whether China's steel market is really warming up due to the stimulation of terminal steel consumption. If coupled with some of the public opinion information on the development of China's steel industry and the lack of in-depth investigation and research on the history and characteristics of the steel circulation industry, it will be more difficult to accurately judge and screen the Chinese steel market. "If macroeconomic data improves rapidly over the same period of last year, the steel market may begin to pick up at the end of the second quarter," said Zhou Guocheng.
However, so far, we have felt the gradual warming of the spring, and felt that the chill of the financial crisis has come back in the slightest, just as we felt about the operating conditions of the industrial economy in the first quarter. We firmly believe that Chinese industries that have undergone the financial crisis will rely on good economic fundamentals, and with confidence and ease, they will be the first to disperse the cold in the world.
In order to understand the operational status of China's industrial economy and explore the countermeasures for the financial crisis, the China Industry News held the first quarter of 2009, China's Industrial Industry Operations Association, on April 29. People from the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Commerce, and key industry associations analyzed the cooling and heating of the industrial economy in the first quarter of the year, including machinery, steel, petrochemicals, nonferrous metals, textiles, ships, electricity, coal, and building materials. The operating characteristics, existing problems, and development trends of the nine key industries have put forward their own opinions and suggestions. Starting today, this edition will open up a column entitled “Special Report on Industry Operations in the First Quarterâ€, which will report on the progress of the nine major industrial sectors in succession. Please pay attention to readers.
Since the rebound of the comprehensive steel price index in mid-February this year, on March 5, China’s steel prices have fallen back to the lowest point of the previous year, and steel producers have again faced large losses.
According to data from the China Iron and Steel Association (hereinafter referred to as China Iron and Steel Association), 72 large and medium-sized iron and steel enterprises included in the statistics generated sales revenue of 449.95 billion yuan in the first quarter of this year, a year-on-year decrease of 21.74%, and realized profits and taxes of 12.363 billion yuan, a year-on-year decrease of 83.07%; The overall loss of profits was 3.308 billion yuan, which was in sharp contrast to the profit of 44.16 billion yuan in the first quarter of the previous year. In the first quarter, 25 large and medium-sized iron and steel enterprises suffered losses, with a loss of 34.72%, an increase of 23.61 percentage points over the same period of last year. Luo Bingsheng, executive vice chairman of China Iron and Steel Association, believes that it is not yet possible to judge whether the economy has recovered. Although car consumption has rebounded in the first quarter, this is mainly affected by the sales policy of small-displacement cars, and sales of some large trucks are still declining. . He said: “In some areas, there have been positive changes, indicating that the central policy has achieved initial results, but there has been no major change in the consumption of the real estate industry that has the greatest impact on steel consumption.†On the whole, there is no shrinking demand in the domestic market. To improve, steel prices in the domestic market are still consolidating at low levels.
According to the relevant person of China United Iron and Steel Network, the current trend of China's steel industry can be described as: the foundation for recovery is still not stable, the internal and external environment is still very severe; the international financial crisis is still spreading, and the impact on China's steel industry is also In the process of deepening, external demand continues to shrink, and exports have fallen by a large margin; overcapacity in the industry, growth has picked up, and economic efficiency has continued to decline.
A: A slight increase in output in the first quarter became a net importer of steel in March. According to the statistics of the China Iron and Steel Association, the country’s crude steel production in March totaled 4,290.44 million tons, with an average daily production of 1.384 million tons, although it was 4.14% lower than the previous month, but still This is higher than the average daily production of 1.367 million tons last year. In the first quarter, the country’s crude steel production was 127,443,500 tons, an increase of 1,749,200 tons over the same period of last year, an increase of 1.39%; and the production of pig iron was 12,237.58 million tons, an increase of 5.039 million tons over the same period of last year, an increase of 4.29%.
According to the latest customs statistics, from January to March, China exported 5.14 million tons of steel, a decrease of 54.8% year-on-year. Among them, 1.67 million tons of steel was exported in March, an increase of 120,000 tons compared with February, and a year-on-year decrease of 59.76%. The net export of steel products was 400,000 tons, a decrease of 14.89% compared with February; it was a decrease of 2.25 million tons, a year-on-year decrease of 84.91%. From January to March, China's total imports of steel were 3.23 million tons, a year-on-year decrease of 22.5%; cumulative imports of 900,000 tons of steel bills were up 17 times year-on-year. Among them, March steel imports 1.27 million tons, an increase of 16.51% compared with February, a year-on-year decrease of 15.33%. In the same period, China imported a total of 131.47 million tons of iron ore, a year-on-year increase of 18.8%. Among them, the import of iron ore was 52.08 million tons in March, a record high, which was 5.34 million tons more than that in February, an increase of 46.2% year-on-year. From January to March, the total amount of coke exported was 150,000 tons, a year-on-year decrease of 94.88%.
B operational characteristics: prices continue to fall after the protection of foreign trade
China Steel Association data show that at the end of March domestic steel comprehensive price index was 97.59 points, a decrease of 6.1 points, a decrease of 5.88%, an increase of 2.17 percentage points from the previous month; a decrease of 44.72 points, a decrease of 31.42%. At the end of March, the long product price index was 99.47 points, a decrease of 8.18 points, or a decrease of 7.60%. The price index of sheet metal was 97.01 points, a decrease of 5.68 points, a decrease of 5.53%. Compared with the same period of last year, the price of long products and plates fell by 31.81%. And 32.42%. The prices of major steel products all declined in different degrees, among which the decline in hot-rolled sheet and hot-rolled coil decreased compared with the previous month, and the decrease in the price of other types of steel products surpassed that of the previous month. Compared with the previous month, the prices of hot-rolled and hot-rolled coils fell by 122 yuan/ton and 199 yuan/ton respectively, with decreases of 2.88% and 5.26%, respectively, down by 0.82 and 2.95 percentage points from the previous month; The prices of rebar and rebar fell 298 yuan/ton and 269 yuan/ton, respectively, down 8.35% and 7.28% respectively; plate fell 321 yuan/ton, down 7.35%; cold rolled sheet and galvanized sheet fell 4.80, respectively. % and 6.94%; seamless steel pipe prices fell 5.91%.
Since this year, Europe and the United States and other countries and regions have filed anti-dumping and anti-subsidy lawsuits against certain types of steel products in China. On April 8th, seven oil pipe producers in the United States and the U.S. Steel Workers Federation filed anti-dumping and anti-subsidy lawsuits with the US Department of Commerce and the U.S. International Trade Commission on China's export of oil pipes to the United States. According to relevant U.S. laws, the U.S. International Trade Commission will decide whether to file a case within 20 business days of receiving the application. "If the United States finally decides to file a case, it will become the largest anti-dumping case that China's steel companies have encountered," said a related person in the China Iron and Steel Association. It is reported that China Steel Association recently convened major domestic steel export enterprises to discuss how to deal with possible anti-dumping and countervailing lawsuits in the United States. According to relevant sources, once the United States formally files the case, the China Iron and Steel Association will organize domestic steel companies to actively respond.
C: The Seven Problems Constrain Development of Long-term Growth of Steel Consumption
Li Xinchuang, deputy dean of the Metallurgical Industry Planning and Research Institute, recently stated that there are seven major problems in China's steel industry: serious capacity and structural excesses, low levels of iron ore resources and shipping guarantees, and inability to independently innovate. However, China’s status as a global steel production and consumption center and the world’s major steel exporter will not change. Before China’s industrialization, steel consumption will continue to grow.
Specifically, the major problems existing in the current steel industry are: First, there is a serious excess of production capacity and structure, especially large backward production capacity. As of the end of last year, China's crude steel production capacity reached 660 million tons, which exceeded actual demand by about 100 million tons. The second is that the capacity for independent innovation is not strong. The research and development and application of advanced production technologies and high-end products also mainly rely on the introduction and imitation. Some high-grade key steel products still need large amounts of imports, and the consumption structure is in the middle and low grades. Third, the industrial layout is irrational. Most steel companies are distributed in large and medium-sized cities in inland areas. Fourth, the industrial concentration is low, and the average steel production scale of crude steel production enterprises is less than 1 million tons per year. The top five steel producers only account for about 28% of the national total. Fifth, iron ore resources and shipping security are low, and their ability to respond to market changes is weak. Domestic iron ore resources have low endowments and self-sufficiency rate is less than 50%. Sixth, the steel market system is immature, and there are more than 150,000 iron and steel product dealers, and the speculative business tends to be heavier. Seventh, the homogeneity of products is serious, and the degree of product extension and deep processing is low.
Li Xinchuang believes that at least the saturation point of steel needs to meet three conditions: First, to achieve industrialization; Second, per capita GDP reached 3500 to 6000 US dollars; Third, the fundamental changes in the industrial structure, the proportion of the tertiary industry more than 50%. According to this standard, China’s iron and steel industry has a long way to go and there is still room for development.
D Recommendations: Controlling Total Costs, Reducing Costs, and Fundamental Guarantees for Steel Companies to Cope
First of all, to do a good job in total control and substantially reduce the cost of raw material purchases is a fundamental guarantee for iron and steel companies to weather the difficulties. The depth and breadth of the impact of the global financial crisis on the real economy continue to expand. The uncertainties and destabilizing factors in the domestic and international economic situation are still increasing. The developed countries’ economy has entered a recession, and emerging economies have been affected by the global financial crisis. The seriousness of expectations has led to a serious shortage of steel demand.
The key to realizing a rebound in the market price of steel products and a turning point for iron and steel enterprises is to balance production and demand, control production, and purchase costs of raw materials. It is necessary to organize production according to market demand, not blindly increase production and control the company’s reasonable inventory; use advanced products to replace backward products, eliminate backward production capacity through market competition, and establish long-term cooperation and mutual benefit and win-win strategic cooperation with raw material suppliers. Partnerships, vigorously reduce procurement costs and improve the economic efficiency of enterprises.
Second, it is necessary to further expand steel exports and ease the pressure on supply and demand in the domestic market. Since April 1, the export tax rebate rate for some steel products has been adjusted, and the export tax rebate rates for cold rolled coils, galvanized coils, color coated coils, hot rolled alloy steel coils, and stainless steel coils have been 5%. Increased to 13%, which will help companies reduce the cost of steel exports. Iron and steel enterprises should take effective measures to stabilise the international market share and open up new steel export channels and export varieties.
Third, we must earnestly implement the industry self-regulation conventions and standardize the competition in the steel market. Large and medium-sized enterprises should really play a leading role in stabilizing the market, strengthen communication and cooperation with traders and direct users, and jointly safeguard the stability of the steel market. In addition, we must also comply with WTO rules and oppose international trade protectionism and low-cost dumping. Demand for steel has continued to slump, leading to a rise in international trade protectionism. At the same time, the sharp devaluation of currencies in neighboring countries has led to a large increase in imports of steel and billets. In this regard, iron and steel enterprises should actively respond to the competition on the one hand, fair competition, equal dialogue, and mutually beneficial cooperation to participate in international market competition, on the other hand to pick up anti-dumping legal weapons to stop the low-cost dumping of foreign products.
E Forecast: Steel prices remain low and the market may pick up at the end of the second quarter. <br> As the international financial crisis has spread from the financial industry to the automotive and real estate industries, automakers in Europe, America, Japan and South Korea and other countries and regions have announced production cuts, real estate The shrinking market led to a rapid decline in the number of new housing starts. The crisis in the auto market and the housing market has greatly affected the upstream steel industry and the demand has shrunk dramatically. Although various countries in the world have successively introduced measures to stimulate the economy, the signs of economic recession in developed countries are still evident. According to statistics of the World Steel Association, from January to February of this year, the world production of crude steel was 170.268 million tons, a year-on-year decrease of 22.9%. Except for China, in January-February, the world production of crude steel was 88.653 million tons, which was reduced by 36.08% in terms of calendar days compared with the caliber. Among them, North America reduced production by 53%, the EU reduced production by 43%, Japan reduced production by 40.9%, the Commonwealth of Independent States reduced production by 35.5%, and South Korea reduced production by 24.7%. The above situation shows that the impact of the financial crisis on the global economy is still deepening, and the international environment and the situation facing the steel market are not optimistic.
A series of plans for expanding domestic demand and ensuring growth will certainly bring positive changes to China's economic development. With the implementation of the 4 trillion yuan investment plan and the introduction of China's export tax rebate policy for steel products on April 1, the situation of weak demand in the steel market will certainly improve.
At the same time, the price of raw materials fell back, which weakened the supportive role of steel prices in the later period. In March, affected by the continued decline in steel prices, the price of raw materials for steel production fell except for coking coal. Among them, the price of metallurgical coke decreased from 14.8% to 16.4%, while domestic iron concentrate, pig iron and scrap prices fell 10.84%, 8.41% and 12.66% respectively; the spot price of imported iron ore dropped 9.6%; Brazil and Western Australia China's ocean freight prices fell by US$6.45/ton and US$1.94/ton respectively.
On the whole, the recent steel market has both positive and favorable factors for domestic expansion of domestic demand, as well as difficulties in deepening the impact of the global financial crisis and continued weakening of demand. It is expected that the steel market price in the later period will maintain a low level of running and fluctuating slightly. Li Xinchuang believes that the development of China's economy has led to the development of China's steel industry, and that secondary industry consumption has dominated domestic steel consumption, with manufacturing and construction accounting for 38% and 54% of total steel consumption, respectively. According to the development experience of developed countries, the realization of industrialization will consume a lot of steel. Before China realizes industrialization, steel consumption will continue to show a growth trend. Zhou Guocheng, chief advisor of China United Steel Network, said that China's steel market presents an open, multi-channel, multi-level flow pattern. The huge number of steel traders can both amplify market demand and amplify market shrinkage. Steel traders are demanders for steel production companies, but they are suppliers to end users who use steel. The expected price increase will increase the inventory, which will amplify the market demand, while the expected price decrease will reduce the inventory, leading to low-cost selling and amplifying the market. Therefore, it is relatively complicated to determine whether China's steel market is really warming up due to the stimulation of terminal steel consumption. If coupled with some of the public opinion information on the development of China's steel industry and the lack of in-depth investigation and research on the history and characteristics of the steel circulation industry, it will be more difficult to accurately judge and screen the Chinese steel market. "If macroeconomic data improves rapidly over the same period of last year, the steel market may begin to pick up at the end of the second quarter," said Zhou Guocheng.