In 2014, the steel industry's sales profit margin was only 0.9%.

Operation of the steel industry in 2014 and outlook for 2015

At present, China's economy has entered a new normal of transition from high-speed growth to medium-high-speed growth, and the steel industry has also undergone new changes. In 2014, the steel industry solved the overcapacity and achieved initial results. The company's efficiency has improved, and energy conservation and emission reduction have made new progress. At the same time, due to the weakening of downstream demand, steel prices have fallen sharply, corporate funds have become more prominent, and the whole industry is still in the “painful period” of transformation and upgrading. The production and operation situation faced by enterprises is still grim.

I. Operation of the steel industry in 2014

(1) The output of crude steel increased slightly, and domestic apparent consumption decreased year-on-year. In 2014, the country's crude steel output was 820 million tons, a year-on-year increase of 0.9%, an increase of 6.6 percentage points year-on-year. The apparent consumption of domestic crude steel was 740 million tons, down 4% year-on-year; the output of steel (including recycled materials) was 1.13 billion tons, up 4.5% year-on-year, and the growth rate was down 6.9 percentage points year-on-year. China's crude steel production accounted for 49.4% of the global total, up 0.9 percentage points year-on-year.

In terms of monthly, the average daily output was 2.25 million tons, of which 2.31 million tons was the highest point in June and the lowest point was 2.11 million tons in November. In terms of varieties, heavy rail decreased by 5.3% year-on-year, long products (steel, bar, steel and wire) increased by 3% year-on-year, medium, thick and extra-thick plates increased by 9.7%, and hot and cold rolled strips increased by 2.7%. The coated plate increased by 12.3% year-on-year, the electrical steel increased by 5.1%, and the pipe increased by 5.4%. In terms of regions, the top five provinces and cities in terms of output growth rate were Ningxia, Zhejiang, Jiangsu, Shaanxi and Liaoning, with growth rates of 17.3%, 8.8%, 7.6%, 6.4%, and 5% respectively; Heilongjiang, Chongqing, Yunnan, The output of 14 provinces such as Beijing and Shanxi has dropped year-on-year, with Heilongjiang, Chongqing and Yunnan falling by 37.6%, 11.6% and 10.4% respectively. In terms of types of enterprises, in 2014, the output of crude steel for key large and medium-sized steel enterprises was 660 million tons, up 1.7% year-on-year; the output of crude steel for small and medium-sized steel enterprises was 170 million tons, down 1.8% year-on-year, accounting for 20% of the national crude steel output. Decrease by 1 percentage point year on year.

(2) Steel exports have increased substantially, and product grades have improved. In 2014, China exported 93.78 million tons of steel products, a year-on-year increase of 50.5%; imported steel products reached 14.43 million tons, an increase of 2.5%, equivalent to a net export of crude oil of 81.53 million tons, accounting for 10.2% of China's total crude steel output. From the product grade, the proportion of high-value-added products of electrical steel strip, coated strip, hot-rolled alloy steel sheet, cold-rolled thin wide steel strip, cold-rolled stainless steel sheet and boiler tube has been improved.

(3) The supply of steel products exceeds demand, and prices continue to decline. In recent years, the overall level of national steel prices has continued to decline. According to statistics, the average sales settlement prices of key large and medium-sized steel enterprises from 2011 to 2014 were 4,468 yuan / ton, 3,750 yuan / ton, 3,442 yuan / ton, 3,074 yuan / ton, showing a downward trend. At the end of December 2014, China's steel price composite index fell to 83.1 points, down 16.2% year-on-year, the lowest level since January 2003. Among them, the three-grade rebar fell to 2791 yuan / ton, down 785 yuan / ton from the beginning of the year; hot rolled coil fell to 3131 yuan / ton, down 528 yuan / ton from the beginning of the year.

(4) The supply and demand pattern of raw materials such as iron ore reversed and the price dropped sharply. Affected by the sharp increase in the production capacity of major international raw material producers and the decline in China's steel output, the supply and demand pattern of steel raw materials reversed in 2014, and prices fell sharply. The CIF price of imported iron ore of 62% grade decreased from US$133.1/ton at the beginning of the year to US$68.7/ton at the end of the year, a decrease of 48%; coke decreased from RMB 1,425/ton to RMB 893/ton, a decrease of 37%. Scrap fell from 2,445 yuan / ton to 1928 yuan / ton, down 21%.

(5) The production cost has been greatly reduced, and the profitability of steel companies has improved. In 2014, the prices of bulk raw materials such as iron ore and coal fell more than steel prices, and the overall economic benefits of steel companies improved. The key statistics of steel enterprises in 2014 achieved profits and taxes of 109.1 billion yuan, an increase of 12.2%; after the profit and loss, the profit reached 30.4 billion yuan, an increase of 40.4%. However, the industry's sales margin is only 0.9%, still at the lowest level in the industrial sector.

(6) The decline in fixed asset investment and the initial contradiction in resolving the overcapacity. In 2014, China's steel industry fixed assets investment was 647.9 billion yuan, down 3.8% year-on-year. Among them, the investment in ferrous metal smelting and rolling industry was 4,798.9 billion yuan, down 5.9%; the investment in ferrous metal mining and dressing industry was 169 billion yuan, up 2.6%. From the perspective of process investment growth, investment in ironmaking, steelmaking and steel rolling processing decreased by 40.4%, 10.5% and 4.8%, respectively. According to the situation of newly started projects, there were 2,037 new projects started in 2014, a decrease of 215 compared with the same period of last year. Among them, 169 iron-making projects were reduced by 51; 287 projects were reduced by 71; and 1561 steel processing projects were reduced by 93. The blind expansion of production capacity has been significantly curbed.

(7) Energy conservation and environmental protection have reached a new level, and major pollutant discharges and energy consumption indicators have declined. In 2014, the steel industry comprehensively promoted energy-saving and emission reduction technologies such as sintering desulfurization and energy control, and the energy conservation and environmental protection effects were obvious. The comprehensive energy consumption of large and medium-sized enterprises per ton of steel decreased by 1.2% year-on-year, total water consumption decreased by 0.6%, new water consumption per ton of steel decreased by 0.5%, total discharged wastewater decreased by 5%, sulfur dioxide emissions decreased by 16%, and smoke dust emissions decreased by 9.1. %.

(8) Significant progress has been made in the development of new technologies and new products, which strongly supports the development of China's equipment manufacturing industry and major projects. In 2014, the pace of technological innovation in iron and steel enterprises was further accelerated. Baosteel BW300TP new wear-resistant steel was successfully used in the production of mixer trucks of CIMC Group (18.97, 0.00, 0.00%), which extended the service life of machinery by more than two times; the safety shell of Angang Nuclear Reactor, Nuclear island key equipment and nuclear power supporting structural parts Three series of nuclear power steels are applied in the world's first third-generation nuclear power project CAP1400; WISCO non-oriented silicon steel is applied to the world's largest single-machine capacity Xiangjiaba 800 MW large hydro-generator; Taigang's thinnest 0.02 mm precision strip steel product fills the blank of domestic high-end stainless steel precision strip steel products; Baosteel's “600°C ultra-supercritical thermal power unit steel tube innovation development and application” won the first prize of National Science and Technology Progress Award.

Second, the outstanding problems in the development of China's steel industry under the new normal

(1) The production capacity is still excessive and the enterprise benefits are polarized. As of the end of 2014, China's crude steel production capacity has reached 1.16 billion tons, still at a relatively high level. From the perspective of enterprise benefits, the top 20 enterprises in the key large and medium-sized enterprises realized an overall profit of 28 billion yuan, accounting for 92% of the total profit of the industry; 19 loss-making enterprises, with a cumulative loss of 11.6 billion yuan, and the polarization of corporate profits was severe.

(2) The financial situation of the enterprise has not been effectively improved, and the problem of bank loan and financing is outstanding. In 2014, the asset-liability ratio of key large and medium-sized iron and steel enterprises was 68.3%, down 0.8 percentage points year-on-year, but 11 percentage points higher than the best-performing industry in 2007. Affected by the banking system's strict control over the overcapacity industry and the credit scale of steel trade enterprises, the bank increased the loan interest rate of the steel industry. In 2014, the financial expenses of key large and medium-sized iron and steel enterprises totaled 93.83 billion yuan, a year-on-year increase of 20.6%, which is three times the profits of enterprises. many. Some banks have taken large sums of money and mortgages on enterprises, and steel companies have stopped production or even went bankrupt.

(3) The concentration of industry is reduced, and homogenization competition is further spreading to high-end products. In recent years, the steel industry has not achieved good results, and the willingness to merge and restructure enterprises has declined. In 2014, the output of the top 10 enterprises in crude steel production accounted for 36.6% of the national total output, down 2.8 percentage points year-on-year. The large-scale steel plate products are mostly high-end products such as automobile plates and electrical steel. There are signs of excess. The market pressure of low-grade oriented electrical steel, non-oriented electrical steel and ordinary quality automobile plate is further increased, and the homogenization competition of high-end products is becoming more and more popular. Intensified.

(4) The export products have increased substantially, which has caused an increase in trade friction conflicts. In 2014, China's export steel accounted for 32.2% of the global steel trade volume, the highest level in history. Among them, the total export of boron-containing steel in the first 11 months was 39.76 million tons, accounting for about 47.5% of the current period. Many countries adopted trade protection measures for China's steel products. In 2014, foreign trade investigations on steel remedies initiated by our steel companies reached 40, and the countries that initiated the investigations in addition to the original developed countries in Europe and the United States, and increased the number of developing countries in Asia, Africa and Latin America, gradually expanded.

(5) The phenomenon of strip steel and ticket sales will disrupt the steel market, and market fair competition needs to be resolved. Affected by the sluggish industry, some small and medium-sized enterprises have adopted market-produced steel and non-ticket sales and other illegal and illegal means to gain market share and profits, seriously disrupting the market's fair competition environment, not only squeezing the market space of formal business enterprises, but also backward production capacity. Providing living space is not conducive to the healthy development of the industry.

3. Prospects for the development of the steel industry in 2015

Overall, the current situation of oversupply of steel in 2015 is difficult to improve, exports will be slightly reduced, steel prices will remain in vain, steel mills will be optimistic about profitability, and the steel market will remain weak.

(1) China's economic development has entered a new normal, and the pace of industrial restructuring and optimization will accelerate. China's economy has entered a new normal of medium-to-high-speed development. The mode of economic development has shifted from scale-type and extensive growth to quality-efficiency and intensive growth. The economic structure has shifted from incremental capacity expansion to adjustment of stocks and deep adjustment of superior and incremental growth. Under the new normal, China's steel consumption has entered the peak arc zone, and the quality of consumption and individualized demand are getting higher and higher. The steel industry has gradually changed from relying on quantity expansion and price competition to relying on quality and differentiated competition. The new normal provides external space and development momentum for the industrial transformation and development of the steel industry, and the pace of structural adjustment will be further accelerated.

(2) The growth rate of domestic investment has declined, and the downstream demand for steel is unlikely to change significantly in the short term. In 2014, the growth rate of national fixed asset investment was the lowest since 2002. Under the background of the profound transformation of China's economic growth model, it is expected that the growth rate of fixed asset investment will be further reduced in 2015, and steel demand is unlikely to change significantly. However, it should also be noted that the “One Belt and One Road”, the coordinated development of Beijing-Tianjin-Hebei, and the Yangtze River Economic Belt will play a certain role in driving demand for steel.

(3) The inertia of steel production capacity has increased, and there is a long way to go to resolve excess capacity. Although the investment in ferrous metal smelting and rolling industry in China decreased by 5.9% in 2014, it is still at a relatively high level. There are still 2,037 new projects in the steel industry. Considering the inertia of the capacity of the previous construction projects, the national crude steel production capacity still remains in 2015. The possibility of growth.

(4) The implementation of the new environmental protection law will increase the environmental protection pressure of iron and steel enterprises. The newly promulgated "Environmental Protection Law of the People's Republic of China" was implemented in 2015. According to the actual investment situation of the steel industry, it is necessary to reach the national new emission standard. The initial estimate of the environmental protection investment of steel per ton needs to increase by 13%, and the operating cost of steel per ton will increase by about 200 yuan, which is about 40% higher than before the implementation. The implementation of the new environmental protection law will urge enterprises to increase investment in environmental protection and promote technological innovation in enterprises.

(V) Adjustment of export tax rebate policy, steel exports declined slightly. In 2015, the state's cancellation of export tax rebates for boron-containing steel will inhibit the export of low-value-added steel products to a certain extent. However, compared with developed countries such as Japan, South Korea and Germany, China's steel products have a price advantage, and domestic excess capacity will actively seek exports. It is estimated that China's total steel export volume will remain at a high level in 2015.

Fourth, maintain the sustainable development of the steel industry in 2015

In 2015, the steel industry should firmly grasp the historical opportunity of comprehensively deepening reforms and promoting strategic adjustment of economic structure, insisting on improving quality and efficiency as the core, adapting to the new economic normal, and striving to create a fair competitive market environment and promote the serious excess of steel production capacity. New progress has been made in resolving and promoting the deep integration of the two industries, enhancing the competitiveness of the steel industry and the efficiency of enterprises.

(I) Improve the standard management of the steel industry

The standard management of the steel industry is an effective attempt to strengthen and improve the management of the industry and conduct post-event supervision, with remarkable results. On the basis of the announced 305 standardized enterprises, the Ministry of Industry and Information Technology will re-revise the "Regulations on the Standardization of the Iron and Steel Industry", strengthen the standard constraints of energy conservation and environmental protection, and introduce the "Management Measures for Standardizing Enterprises in the Steel Industry" to regulate the enterprises that have been announced. Conduct dynamic management. At the same time, build a comprehensive database of standardized enterprise information to provide information support for standardized management.

(II) Promoting the integration of the two industries in the steel industry

According to the overall arrangement of “Integration of Raw Materials Industry and Two-in-One Deep Integration Promotion Plan (2015-2018)” (Ministry of Industry and Information Technology [2015] No. 25), the Ministry of Industry and Information Technology will focus on promoting the integration of the steel industry in 2015 and launching a demonstration of smart factory application. It promotes and revise a number of two-in-one integration standards, supports the transformation of large-scale steel enterprises' own e-commerce platforms to the industry's open platform, and promotes the processing and distribution of individual orders such as automobile panels and shipbuilding panels.

(3) Strengthening industry planning and guidance

In conjunction with the "China Manufacturing Power 2025 Planning and Development Outline", in order to promote the steel industry from large to strong, the Ministry of Industry and Information Technology will formulate the "Steel Industry Transformation Development Action Plan" in 2015 to further promote the implementation of relevant supporting policies and measures; At the same time, the Medium and Long-term Development Plan for Iron Ore Industry (2010-2025) will be released in due course to guide the sustainable and healthy development of China's iron ore industry.

(4) Continue to promote the contradiction of overcapacity in steel production capacity

Further implement the "Guiding Opinions of the State Council on Resolving the Contradictions of Serious Overcapacity in Production Capacity" (Guo Fa [2013] No. 41), and do a good job in the release and supervision of the elimination of backward tasks in 2015. Actively maintain a fair competitive market environment, and carry out special campaigns against land and strip steel with quality inspection, industry and commerce, development and reform departments. Taking the implementation of the new environmental protection law as an opportunity, it will strengthen the post-event supervision with relevant departments and force the excess capacity to withdraw from the market.

(V) Promoting upstream and downstream industry cooperation

Relying on the coordinated work mechanism established by our department, we will continue to promote the promotion and application of high-strength steel, high-performance electrical steel, marine and offshore steel, promote standard revision and promote the processing and distribution of marine steel. Promote to solve the policy obstacles and market bottlenecks encountered in the promotion of domestic high-end wear-resistant steel and other steel products.

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