The steel industry has entered a period of steady growth

On March 25, the official website of the China Iron and Steel Industry Association announced the content of its vice president and secretary-general, Zhang Changfu, at a conference. Among them, Zhang Changfu stated that this year's steel market situation will be better than last year. At the same time, the Chinese steel industry will enter a period of steady growth, and the annual growth rate of crude steel production will be 2-3%, but it will face the situation of “high productivity, high cost, and low efficiency” for a long period of time.

According to its introduction, 2012, which was just in the past, was the "winter" and "winter" of the steel industry. The growth rate of domestic and foreign economies fell, the demand for steel products weakened, prices fell sharply, and prices of raw materials ran high. As a result of the rise, the business situation faced by the steel industry last year was extremely severe.

It is reported that the economic benefits of China's steel companies fell sharply last year, and large and medium-sized steel companies are basically operating at a loss.

Data show that last year, China's crude steel 716 million tons, an increase of 3.1%, compared with 2011, the growth rate fell 5.8 percentage points, is the least year of growth in recent years; key large and medium-sized steel companies after the profit and loss offset, the profit is only 1.58 billion yuan, a year-on-year decrease of 87.036 billion yuan, a decrease of 98.22%, that is, the profit per ton of steel was only 2.6 yuan.

However, Zhang Changfu expressed optimism about the situation of the steel market this year. He believes that the situation of the steel market this year will be better than last year. In 2013 and in the future, China’s urbanization, urban trajectory, and railway investment will increase at a faster pace, which will have a major driving effect on steel consumption.

According to Zhang Changfu, China’s growth rate in fixed assets will increase this year, and it is estimated that investment growth will exceed 2012, which may reach about 24%, which is an increase of 4 percentage points over the previous year.

He cited data that the total investment for urban rail transit in 2012 was 260 billion yuan, and it is estimated that the investment scale in 2013 will reach 280-290 billion yuan.

He pointed out that according to the deployment of the National Railway Working Conference this year, China's railway investment in 650 billion in 2013, of which 520 billion in capital construction investment, is the highest investment in railway investment in the past three years.

It is worth mentioning that he also expects that the demand for steel in the downstream steel industry will increase moderately in 2013 and will play a decisive role in the steel market. Among them, the railway, urban infrastructure and rail transit, machinery manufacturing, and automotive industries have a relatively good growth situation, while the real estate and household appliance industries will also achieve steady growth.

He cited data and viewpoints that this year's investment growth in the real estate market will remain flat or slightly increase compared with 16.2% in 2012; the market demand for machinery industry products will rise moderately in 2013 and will increase steadily over the previous year. The total output value and sales growth rate are expected to be around 12%. This year, the demand for the automotive market is 20.8 million units, with a growth rate of about 7%. Affected by the end of the home appliances to the countryside policy, 2013 will be the year for home appliance industry adjustment. However, the Ministry of Commerce stated that this year the State Council will study new policies to encourage household appliances consumption from the aspects of energy conservation and emission reduction. For this reason, the increase in the home appliance industry will continue to be around 10%.

Based on this, Zhang Changfu believes that the steel market situation this year will be better than last year. However, he also pointed out that in the future China’s steel market will no longer be able to maintain a growth rate of more than 10% as it used to. It is unlikely that there will be a substantial increase in volume, and the steel market will experience a rational return. The annual growth rate of crude steel may remain at About 2-3%, crude steel production will be maintained at a level of 780 million tons for a long time, and the steel industry will be in a state of “high productivity, high cost, and low price” for a long period of time.