2013 steel demand weakness is not a big change

As the country has increased its “steady growth” measures, steel prices have rebounded slightly since late September 2012, and the steel market has seen signs of gradual improvement.

In the second half of last year, the National Development and Reform Commission approved 25 new urban rail transit projects and 13 highway projects. The number of newly started railway projects increased by 13 from 9 set at the beginning of the year to 22, and the fixed-railway investment plan for this year increased by 516 billion yuan. To 630 billion yuan. Therefore, the investment in fixed assets across the country will increase significantly in the fourth quarter. The demand for the steel market will rebound from the first three quarters, and the weak demand for steel products will change.

However, due to the fact that the steel production capacity is significantly greater than the demand, the current steel price is weak and it is difficult to continue to pick up the situation. It remains to be seen whether the market can be stabilized.

A major difficulty in the major steel industry, railway construction investment and real estate (new start) development investment are negative growth, shipbuilding industry completion, new orders, hand-held orders, etc. have dropped substantially, the total industrial output value of machinery, automobiles, home appliances industry (Product output) Weak growth or increase in prices fell sharply, and there was no major change in the weak demand situation in the steel market.

On the other hand, it is difficult for the original fuel price to drop sharply, and the profitability of the company is greatly reduced. After the end of September, the steel price rebounded slightly, but the original fuel price also rebounded rapidly. If the spot price of imported iron ore rebounds by 180 yuan per ton, steel companies continue to face high cost pressures.

The loss in the steel industry has intensified, and the task of turning losses into losses is arduous. Although iron and steel enterprises have done a lot of work in developing markets, saving energy, reducing costs, and increasing efficiency, large and medium-sized steel companies are still in a loss-making situation in the entire industry.

Because of this, it is more difficult for steel prices to continue to rise in 2013.

The efficiency is unlikely to significantly improve For the development trend of China's steel industry in 2013, industry experts generally expect that as China's economic growth gradually bottomed out.

In 2013, investment will still be the main driving force for economic growth, but the investment structure will be optimized. China's crude steel production and steel demand will continue to maintain a slight increase, and a slight increase in steel price fluctuations may become the main tone. However, the problem of the rapid growth of the Chinese steel industry over the years will not be solved in the next few years. In 2013, it will enter the destocking and decapacity process, and the steel market will continue to operate under an imbalanced supply that exceeds the demand. , The industry benefit is difficult to significantly improve.

The response of the steel industry in 2013 is to effectively change the mode of development, that is, shifting from focusing on economies of scale to improving the quality and efficiency of products, increasing the variety, quality, and service, increasing market share, and increasing the ability of enterprises to earn income.