Abstract Following the first decline in China's crude steel output in the first five months of this year in the past five months, the China Steel Association official website issued a warning that the steel industry may reappear in July. In fact, due to the continued weak demand for steel, coupled with the rising trend of imported mineral prices, there are already many...
Following the first decline in China's crude steel output in the first five months of this year in the past five years, the China Iron and Steel Association official website issued a warning that the steel industry may reappear in July. In fact, due to the continued weak demand for steel, coupled with the rising trend of imported mineral prices, many steel mills have been forced to lose money. According to data released by China Steel Association, in June 2015, the number of iron ore import licenses issued in China was 107,448,400 tons, up 5.69% from the previous month, and the amount was about 6.7 billion US dollars, with an average price of 62.34 US dollars / ton. “Overall, in June, due to the weakening of steel demand, prices have unilaterally fell sharply, but iron ore prices have been hovering at high levels. However, due to special bank-to-business loans and letters of credit review in the second half of the year, During the period, steel mills had to choose temporary loss production.†The relevant person in charge of China Steel Association said.
At the same time, China Steel Association predicts that in the third quarter, the steel market will gradually enter the off-season. It is expected that steel demand will further weaken. At the same time, considering that steel mills are currently experiencing serious losses, it is expected that steel mills will reduce production in large areas in July.
Qu Xiuli, vice president of China Steel Association, analyzed that in the first half of this year, the global economy has slowly recovered, and China’s economy continues to suffer downward pressure. Some new situations have emerged in the operation of the steel industry. First of all, in the context of oversupply, the industrial concentration of the steel industry is still declining, vicious competition is more intense, and price competition will still be the most effective means for enterprises to seize the market. In addition, due to the strict control of the credit system scale of overcapacity in the banking system and the difficulty in profitability of steel companies, enterprises generally feel that the funds are tight, and the problems of financing difficulties and expensive financing are further highlighted. In particular, some small and medium-sized enterprises and loss-making enterprises are more difficult to operate in the face of bank loans and loans.
However, although the days are difficult, the steel industry still has a long-term "money scene." Chen Kexin, chief analyst of Lange Steel Economic Research Center, analyzed that according to the “One Belt, One Road†construction plan, transportation, transportation, communication and other aspects of interconnection will become the investment focus, and the total investment in the future is expected to exceed 10 trillion US dollars. In addition, since these investments are all “hard state†infrastructure investments, the unit steel consumption intensity is significantly greater than the general investment, which promotes the annual demand for steel in China to leap to 1 billion tons, or even higher, and will become the global economy. A powerful engine for recovery.
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