Abstract Overcapacity and high mineral prices are topics that have been repeatedly mentioned in the steel industry for many years, but they have not been solved. In the recent high-end forum on iron ore development organized by the Metallurgical Industry Planning and Research Institute, experts said that the demand for steel in 2014 will increase slightly, but...
Overcapacity and high mineral prices are topics that have been repeatedly mentioned in the steel industry for many years, but they have not been solved. In the recent high-end forum on iron ore development organized by the Metallurgical Industry Planning and Research Institute, experts said that the demand for steel in 2014 will increase slightly, but the problem of overcapacity in steel is still very prominent, and the task of de-capacity is arduous. Due to the rigid demand for steel production, iron ore prices will continue to be supported. Overcapacity problem
The Metallurgical Industry Planning and Research Institute recently released the results of the 2014 steel demand forecast. In 2014, the domestic and international economic environment is getting better and the demand for steel will increase slightly. It is estimated that the national steel demand in 2014 will be 715 million tons, up 3.2% year-on-year; Production will reach 810 million tons, an increase of 3.8%.
From the forecast growth rate in 2014, there will be a significant slowdown compared to the growth rate in 2013. According to data from the Metallurgical Industry Planning and Research Institute, the demand for steel in 2013 is expected to be 693 million tons, up 6.3% year-on-year; the output of crude steel is 780 million tons, up 6.7% year-on-year.
"China's steel industry has been seriously oversupplied. In 2012, it has reached 1 billion tons of design capacity, and the actual production capacity is far greater than 1 billion tons." Li Xinchuang, president of the Metallurgical Industry Planning and Research Institute, said that due to technological progress and operational level And the production efficiency has improved. The current national steel production capacity has far exceeded the design capacity, and the problem of overcapacity is very serious.
The data shows that crude steel production in most countries (regions) has declined year-on-year this year. After deducting China's production, global crude steel production in January-October fell by 1.3% year-on-year. In contrast, China's crude steel output in January-October was 652 million tons, an increase of 8.3%.
“The increase in steel production is more dependent on inventory and export growth.†Li Xinchuang said that in the first ten months, China’s exports of steel reached 51.972 million tons, a year-on-year increase of 13.5%. However, the current international trade friction in steel has increased, and the difficulty of export is increasing. "The problem of overcapacity through export is not possible in the short term." Li Xinchuang said bluntly.
How to resolve the problem of overcapacity has already become the primary problem facing China's steel industry. Li Xinchuang said that it is necessary to digest, integrate, eliminate and transfer overcapacity. It is important to speed up the elimination of backward production capacity. Overcapacity should be resolved from environmental protection and capital measures.
"Resolving the excess needs a real knife, and it will never be a one-off process. It will be a long process." Li Xinchuang bluntly said that although the steel market environment is cautiously optimistic next year, the profitability of the steel industry is still difficult, and the situation of meager profit will still be Long-term maintenance.
Supply and demand contradictions are still difficult to solve
Despite the slowdown in steel production growth, demand for iron ore continues to grow. The Planning Institute predicts that the demand for iron ore finished ore in China will reach 1.172 billion tons in 2014, an increase of 3.0% year-on-year; the demand for imported iron ore still accounts for more than 70%, and it is estimated that 845 million tons of iron ore will be imported in 2014. .
Li Xinchuang said that as production continues to grow, rigid demand will continue to support iron ore prices. Only by expanding supply and breaking monopolies can prices return to reasonable.
Data show that from January to October, China imported 669 million tons of iron ore from 74 countries, an increase of 60.17 million tons compared with the same period of last year, an increase of 9.9%. The total cost was 86.32 billion US dollars, and the average import price per ton of mine was 129.1 US dollars, a decrease of 2.4% compared with last year. From the perspective of importing countries, in the first ten months, a total of 463 million tons of iron ore were imported from Australia and Brazil, accounting for 69.4% of the total iron ore imports in the same period.
“The import price of US$130/ton is still high compared with the cost. The high price of imported iron ore is determined by the market demand and the status of domestic resources.†Zhang Changfu, vice president and secretary general of China Iron and Steel Association, said frankly that domestic iron ore The industry and the steel industry are not synchronized, and there are problems such as low industrial concentration, corporate tax burden, and low operating efficiency. It is difficult to compete with international giants.
It is understood that the development of China's iron ore domestic mines is subject to many factors. Due to poor resource endowments, domestic iron ore grades have fallen from an average grade of 33% in 2000 to 28% in 2012. At the same time, the extensive development mode, the limitation of process technology, and the limited use of resources can also cause the slow development of domestic mines. In particular, domestic iron ore enterprises face more tax burdens and increase the burden on enterprises.
Due to the high cost, the domestic iron ore market is less competitive. According to Yang Jiasheng, secretary general of the China Metallurgical and Mining Enterprise Association, “the national mining industry’s macro tax burden averages 11.6%, while Australia and Brazil only have 4%-5% tax burden. The total cost of domestic iron fines is equivalent to Rio Tinto’s shore. 2.8 times the cost, 2.6 times the cost of BHP Billiton."
In this regard, Zhang Changfu pointed out that policy support for mines should be strengthened to support the exploration and development of domestic iron ore. At the same time, it is necessary to strictly control the total amount of steel, strengthen the elimination of backwardness and upgrading, reduce inefficient production, and suppress the consumption and demand of iron ore from the source. According to him, China Steel Association will continue to cultivate iron ore price index and enhance China's right to speak.
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