Iron and steel industry faced "extremely serious" internal and externa
Iron and steel industry is like a microcosm of China's manufacturing industry – big but not strong, disorderly competition, resources to be imported, low profit margins.
Financial crisis, the impact of a huge iron and steel industry. From the end of 2008 to the first half of 2009, as part of China Iron and Steel Association statistics, 68 large and medium steel mills there have been 8 consecutive month of losses; in 2009 as a whole, the Chinese steel industry's overall profit margin is 2.43%, only slightly higher than the one-year deposit rate.
Now, the steady rise of the world economy growing momentum of consolidation, iron and steel enterprises seem to have gradually revived. Hebei Iron and Steel Group in the first quarter from the operating situation, crude steel production is growing, rising steel prices and profits also increased. All seemed to get better.
However, there are indications that the current iron and steel industry is not placed far from the time I celebration, the industry still face grave of "foreign threats and internal problems."
Caught the naturally high iron ore prices continue to go. More than 60% of China needs to import iron ore. The current spot price of iron ore imports as high as 170 U.S. dollars per ton, compared with last year's low of 59.1 U.S. dollars nearly doubled. Support in the spot price under the CVRD, Rio Tinto, BHP Billiton announced today are to give up the traditional annual pricing system, changing over to the quarterly pricing. In at the seller's situation, the three major iron ore suppliers holdout, asked nearly 100% gain.
Lange Steel Information Research Center Houzhi Yun believes that the short-term contracts based on spot prices pricing, the pricing of iron ore will further "Index futures" and "hot money" may be the influx of iron ore and steel market, will result in steel production enterprises the pricing of raw materials is more to lose the right to speak, and gradually reduced to a simple workshop.
And iron ore prices rose will adversely affect China's macro-economic. Lower steel prices will make appliances, automobiles, machinery, shipbuilding and real estate sectors in all terminals increased raw material costs, which will further aggravate the country's current inflation is expected to affect the steady growth of national economy as a whole.
Foreign aggression of the community, and concern has to be solved within
To a large extent, within the worry is the source of foreign aggression.
Within the steel industry's biggest worry is that the current overcapacity. China's crude steel production capacity is up to 7 million tons, the excess capacity of 1 million tons. More troublesome, because the local iron and steel enterprises are driving force of GDP, some local governments willing to be launched steel projects, out of the region's lack of motivation behind the iron and steel production. The results, while China's steel industry complaining about the "excess capacity", while a production capacity continues to grow.
Huge iron ore production to have huge demand, resulting in soaring iron ore prices, the upstream mines to earn excess profits. The iron and steel enterprises due to intense competition, lack of pricing power of steel, with yield no benefits, poor processing fees can only earn one point.
Low concentration of iron and steel industry in China is the chronic illness. China's current size of about 800 mills, industry concentration is low. 2009, China's top five steel mills of the national crude steel crude steel production accounted for only 29% of the total, while South Korea's Posco's crude steel production of a business that accounted for more than lowering their prices for the country's total. Low concentration is also China's steel mills on the upstream raw materials, an important reason for the lack of pricing power.
To improve concentration, it is necessary to promote mergers and acquisitions among the steel mills. However, because of local protectionism, and other factors, mergers and acquisitions, especially in inter-provincial mergers and acquisitions, has been riddled with obstacles.
Industry experts believe that unresolved, including worry, no addition to the case of foreign aggression, the healthy development of steel industry will be greatly restricted. In order to eliminate internal and external, both require enterprises to change their mode of development, quality for benefits and to enhance the impact of upstream and downstream industries; decisive shot the relevant government departments need to increase elimination of backward, merger, reorganization efforts, to break the iron ore Stone monopoly, safeguarding the interests of the Chinese iron and steel enterprises.
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