The hottest strategy for iron and steel industry t

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China Iron and Steel Association said, "the iron and steel industry has fallen into the loss of the whole industry in January and February this year. Although the profit and loss may be flat in March, from the perspective of the first quarter, the loss of the whole industry is undoubtedly. This is the first loss of the whole industry since entering the 21st century."

since many equipment using computer skills were not selected for pc2011, the main iron and steel industry of steel enterprises has started to lose money, and the loss per ton of steel in December reached 128 yuan. Now, steel enterprises are attributed to the "double squeeze of high costs and declining demand" for the first time since 2000. It's true. China has no say in the price of iron ore, which is controlled by the world iron ore giants in Brazil and Australia. China is the ultimate loser in every negotiation. As a result, the import cost of iron ore continues to rise. At the same time, there are many steel enterprises in China, and the output is not low. However, there are many extensive types, the management cost remains high, the production efficiency is low, and the self digestion ability is very poor in case of a slight increase in cost or a decline in demand, resulting in a loss soon

the sharp decline in steel demand is closely related to China's macroeconomic environment. GDP fell for five consecutive quarters; The profit growth rate of industrial enterprises has declined, especially that of state-owned enterprises; The year-on-year growth rate of automobile and household appliance sales fell sharply; Real estate investment and trading volume are declining; Various reasons for power consumption in the first quarter led to the sluggish growth of the friction and wear testing machine industry, with a year-on-year decrease of 5.9 percentage points; The year-on-year growth rate of total retail sales of social goods is declining; The growth rate of import and export fell sharply year-on-year. Investment growth, consumption growth and import and export growth are all declining. In particular, China's actual use of foreign capital showed a negative growth for five months. Steel demand mainly depends on investment growth. In the first quarter, the fixed asset investment was 4786.5 billion yuan, and the nominal increase year-on-year should be replaced by contacting the manufacturer. The growth rate was 2.9 percentage points lower than that of the whole year last year (excluding the price factor, the actual increase was 18.2%), of which the real estate investment increased by 20.7%, 4.4 percentage points lower than that of the whole year last year, and 10.6 percentage points lower than that of the same period last year. Both fixed assets and real estate investment are falling sharply, and the decline in steel demand is normal

the increase in costs and the decline in demand are only direct and superficial factors. The deep-seated reason is the abnormal, extensive and exhausting growth of China's economy in the past years. This growth greatly distorts the demand for steel. This distortion is now exposed, and the price has come. Looking back on the past 10 years, China's economic growth has basically been driven by investment and export. The investment has maintained an investment growth rate of about 30% every year. National key industrial projects have been launched in a rush, and local governments have extensively deprived cultivated land for development. Real estate is almost laissez faire to irrational growth, and house prices continue to soar. Especially after the outbreak of the financial crisis in 2008, the carriage driving China's economic exports came to an abrupt end. In response to the financial crisis, a large investment of 4trillion yuan was launched, plus a large amount of credit. Regardless of the pressure of digestion capacity and overcapacity, blindly large investment, large projects, large loans, this expansion has led to an abnormal surge in production demand for steel products, led to the irrational development of the steel industry, and a number of approved or unapproved steel enterprises have been launched on a large scale

however, now the large investment dividend of 4trillion yuan has disappeared, especially after the implementation of real estate regulation, the real estate industry has fallen into a state of overall depression, A large number of high-speed rail, etc "In the two years from 2015 to 2017, key projects were greatly compressed due to capital problems. China's economy has declined for five consecutive quarters, and naturally the demand for steel products began to plummet. According to the iron and steel production capacity and scale during the investment period of 4trillion yuan, of course, there was excess. That is to say, the iron and steel industry fell into a loss, and the foreshadowing was laid from the period of large investment.

one of the Countermeasures of the relevant departments is to adopt mergers and acquisitions to make the industry Improve the concentration to deal with the difficult situation of steel enterprises. How about the final effect? It's really hard to say. However, some problems must be considered: excessive industrial concentration is not conducive to competition, and it is easy to form a monopoly. Now the monopoly situation caused by monopoly enterprises is struggling to find a good way to break, how can it create a new monopoly? In the author's view, it is a price that must be paid to let some iron and steel enterprises go bankrupt. It can be divided into two categories: one is that of the 357 million tons of production capacity started since 2005, 79% of the production capacity has not been approved by the state according to the regulations, and nearly 80% of these illegal projects and enterprises must not hesitate to let them go bankrupt. The other is the capacity that meets the national construction scale and standards and has been approved and approved by the state, which can be solved through reorganization and merger

of course, through measures to significantly stimulate consumption and expand domestic demand, we will speed up the pace of investment in key ongoing construction projects and put the investment funds for affordable housing in place as soon as possible, so as to completely stimulate China's economy and turn various economic indicators from decline to rise, which is the fundamental way to reverse the depression of the steel industry

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