Steel mills suffer huge losses in the century

In the first quarter, the growth rate of the national economy slowed down and steel consumption fell into the off-season. However, steel production continued to grow, stocks rose sharply, and the situation of oversupply in the steel market was even more severe, resulting in continued decline in steel prices and the industry was in a serious loss situation. The first quarter of this year is the most difficult quarter for the steel industry since the beginning of the new century.

The huge capacity of the steel industry has become a heavy sword of Damocles hanging over the company.

According to the latest data from the China Iron and Steel Association, the average daily output of crude steel of the members of the China Iron and Steel Association was 1,702,100 tons in the second half of April, which was an increase of 0.77% compared with the previous period. The average daily output of crude steel was estimated to be 2,218,700 tons, which was a month-on-month increase of 0.61%. According to data from the National Bureau of Statistics, crude steel production in April was 68.84 million tons, an increase of 2.1% year-on-year, and the average daily average crude steel production was 2.295 million tons in the same month, which was a record high.

With the deep adjustment of the real estate industry, the winter of the steel industry seems to have just begun.

The total output of steel production fell by a large amount still remained high. "In the first quarter, the national economy slowed down and steel consumption fell in the off-season. However, steel production continued to grow, stocks rose sharply, and the steel market's oversupply situation became more severe, resulting in a continuous decline in steel prices. The whole industry is in a serious loss situation. The first quarter of this year was the most difficult quarter for the steel industry since the beginning of the new century.” At the China Iron and Steel Association (hereinafter referred to as China Steel Association) information conference, Zhang Changfu, vice chairman of China Iron and Steel Association Say.

China Iron and Steel Association statistics show that in the first quarter, the country’s cumulative production of pig iron, crude steel and steel (including duplicating materials) was 179.7501 million tons, 202.701 million tons and 26.141 million tons, respectively, an increase of 0.14%, 2.37% and 5.3% respectively; In the same period of last year, they dropped by 7.44, 6.73 and 7 percentage points respectively. The average daily output of crude steel is 2,252,200 tons, equivalent to an annual production of 822 million tons. In the first quarter, China’s crude steel production accounted for 49.97% of the world’s total production, which was 0.03 percentage points lower than the same period of last year.

Decline in export prices Domestic prices continued to fall China Steel Association statistics show that in the first quarter China exported 18.33 million tons of steel, an increase of 3.9 million tons, an increase of 27.0%; imported steel 3.59 million tons, an increase of 360,000 tons, an increase of 11.3% ; The equivalent of 15.68 million tons of crude steel exports, an increase of 3.77 million tons, an increase of 31.7%. Imported iron ore was 222.01 million tons, an increase of 36.01 million tons over the same period last year, an increase of 19.4%.

The average export price of steel was 794.06 US dollars / ton, down 63.22 US dollars / ton, a decrease of 7.37%; the average price of imported steel was 1,236.49 US dollars per ton, an increase of 43.58 US dollars, an increase of 3.65%; imported iron ore price of 127.95 US dollars per ton , a year-on-year decrease of 7.47 US dollars, a decrease of 5.52%.

At the end of March, the domestic comprehensive steel price index (CSPI) was 94.83 points. On the basis of the 11.66% year-on-year drop in the prices at the end of March last year, it was down by 11.28% year-on-year; it was down 1.63 points, or 1.69%, and fell for the seventh consecutive month; In the first quarter, the statistics of iron and steel enterprises' steel settlement prices fell by 368 yuan per ton, a decrease of 10.14%. The price index of long products was 96.75 points, a year-on-year decrease of 11.28%; the price index of sheet metal was 95.26 points, a year-on-year decrease of 11.12%. Since April, prices have picked up slowly. On April 18, the comprehensive steel price index was 96.39 points, which was 1.56 points higher than that at the end of March.

Over 8 of the new investments became private investment. Zhang Changfu said that in the first quarter, the national fixed assets investment in the iron and steel industry (including the ferrous metal smelting and rolling processing industry and the ferrous metal mining and selection industry) was 89.3 billion yuan, a year-on-year decrease of 3.34%. The investment in assets was 71.6 billion yuan, an increase of 6.65% year-on-year; the private investment in the iron and steel industry accounted for 80.18% of the total investment. The total investment in fixed assets of the smelting and rolling processing industry of ferrous metals was 71 billion yuan, a year-on-year decrease of 7.5%. It was 13.9% higher than the same period of last year, of which private investment in fixed assets was 56.3 billion yuan, an increase of 2.5% year-on-year; fixed metal investment in the mining and selection of ferrous metals 183 billion yuan, a year-on-year increase of 17.1%, an increase of 7.4 percentage points over the same period of the previous year, of which private fixed-asset investment was 15.3 billion yuan, a year-on-year increase of 25.3%.

Market Shares Significantly Decreased Economic Benefits Sharply Declining Economic Benefits Steel Association statistics show that steel inventories increased significantly in January and February of this year. By the end of February, steel society stocks in major markets nationwide reached 20.86 million tons, an increase of 7.35 million tons from the beginning of the year, an increase of 54.42 %. Inventories declined in March. By the end of March, steel society stocks were 19.41 million tons, which is still 43.65% higher than the beginning of the year. The large increase in inventories indicates that the demand is weak and the output is high.

The inventory of steel enterprises has also shown a significant increase this year. According to the statistics of the China Iron and Steel Association, by the end of March, the steel stocks of member steel enterprises were approximately 15.22 million tons, an increase of 3.76 million tons from the beginning of the year, an increase of 32.3%; and an increase of 1.72 million tons over the same period of last year, an increase of 12.5 million. %.

In the first quarter, key statistics on iron and steel enterprises realized sales revenue of 868.887 billion yuan, a year-on-year decrease of 0.79%; realized profits and taxes of 14.647 billion yuan, a year-on-year decrease of 32.46%; and a profit of 2.329 billion yuan, a year-on-year decrease of 5.604 billion yuan. The cumulative loss rate was 45.45%, an increase of 14.77 percentage points year-on-year; the sales margin was -0.27%, a year-on-year decrease of 0.64 percentage points.