For the whole August, the total social inventory of 5 categories of steel in 20 cities in China increased more than that in July, among which rebar and hot-rolled coil increased more.Inventories totaled 14.02 million tons in August, up 10.3% or 1.31 million tons.Among them, the total steel market inventory is 13.15 million tons, with a month-on-month increase of 1.3 million tons, up 11.0%; port inventory is 870,000 tons, with a month-on-month increase of 10,000 tons, up 1.0%.
The year 2018 is a "spring" for steel enterprises. Steel prices have jumped to a high point.However, the first half of this year is subject to the cost of the squeeze, steel enterprise performance generally fell, on the evening of August 22, a number of steel stocks issued a semi-annual report, net profit fell in the 40%.Rising raw material prices, weak downstream demand and environmental pressures have made the first half of the year difficult for steelmakers.
What to make of the idea that steel companies are waving goodbye to their golden age?What are the main downward factors of steel price?Is the practice of insuring prices by limiting production sustainable?What changes can industrial Internet + bring to the steel industry?To answer these questions, China economic times interviewed liu jie, the price monitoring center of the national development and reform commission.
High profits cannot last forever
China economic times: data from the China iron and steel association shows that steel prices fell to a certain extent in August.Over the same period, total domestic steel inventories have risen for six consecutive weeks.What do you think of the view that steel companies are waving goodbye to their golden age?
Liu jie: it should be noted that since 2016, the steel industry as a whole has shown a steady trend of good development.Mainly in the following aspects.
First, steel prices.Steel prices began to rise from 2016, 2017 is a rapid rise, 2018 is a steady rise.According to the price monitoring center of the national development and reform commission, the average price of major steel wholesale markets in China was 2,901 yuan/ton in 2016, 4,145 yuan/ton in 2017 and 4,531 yuan/ton in 2018, respectively up 5.2%, 42.9% and 9.3% over the previous year. What is worth noting is that the price level in 2018 is the highest level since 2013.
Second, industry profits have risen sharply.According to the data released by cisa, its member enterprises lost more than half of their profits in 2015, but made a profit of 177.3 billion yuan in 2017 and 286.27 billion yuan in 2018, showing a significant improvement in enterprise benefits.
Third, the industry deleveraging achieved certain results.According to cisa, the debt-to-asset ratio of cisa members was about 65 percent in 2018, down about 5 percentage points from 2016.In addition, the reduction of excess capacity and clearing of floor steel has also achieved solid results, the iron and steel industry supply and demand also tend to be reasonable.
Therefore, from the above point of view, in recent years is the golden age of the steel industry is a certain truth.But since November 2018, steel prices have started to fall. According to the price monitoring center, the average price of steel in the first half of 2019 was 4,365 yuan per ton, down 95 yuan per ton from the same period in 2018.Meanwhile, profits in the steel industry declined in the first half of 2019 due to rising raw material costs.Cisa data shows that in the first half of 2019, member enterprises made a total profit of 106.5 billion yuan, down 20.5 percent year-on-year.
In my opinion, the previous high profit is not sustainable, but also can not appear in 2015 as a large area of losses, on the whole, the steel industry profits will be compressed, will return to normal and reasonable profits.So it is not so much the passing of the golden age of steel as the shift from high to reasonable profits.
We need to consolidate our existing achievements in the market
China economic times: what do you think are the main factors contributing to the current decline in steel prices and excess capacity?
Liu jie: in my opinion, the current steel price decline is in line with the characteristics of the whole steel market off-season.In July and August, affected by high temperature and rainfall, downstream demand is weak, steel inventory has accumulated, price decline is in line with market expectations.However, due to the fact that the dividend of supply-side structural reform has been weakened, the production limit of environmental protection is not "one size does not apply", and the demand of downstream markets including automobiles, real estate, shipbuilding and other relatively weak factors, the price of steel in 2019 is relatively certain to be lower than that of last year.
China's crude steel output was 492 million tons in the first six months of 2019, up 9.9 percent from the same period last year, which also triggered market concerns about overcapacity.From the perspective of consolidating market achievements, the following three points should be achieved.
First, we need to consolidate our efforts in cutting overcapacity, eliminate backward production facilities and prevent their resurgence.Second, we should actively and steadily promote industry mergers and reorganizations, encourage excellent enterprises to optimize the layout in the restructuring process, so as to promote high-quality development of the industry.Thirdly, we should strengthen the examination and strictly crack down on illegal production capacity so as to effectively maintain market order.
The practice that limits production to protect a price is short-term action, cannot last
China economic times: due to the recent steel market prices generally fall, steel enterprises to achieve a sharp decline in the level of profit, some enterprises and steel varieties even appear losses, some steel enterprises through production limit to protect the price, steel enterprises through production limit to protect the price of the practice how do you look at?Does this work?
Liu jie: at present, the steel inventory has indeed been reduced, but the demand has not significantly boosted, in addition, the overall steel inventory is still higher than the same period, the supply is still under pressure.But iron ore prices have fallen, and steel profits have been repaired, perhaps with a return to production.Steel enterprises through the production limit to protect the price of the practice is a short-term act, not sustainable.
Industrial Internet can promote the high quality development of the steel industry
China economic times: on August 14, 2019, China (hangzhou) industrial Internet conference will open. In your opinion, what changes can industrial Internet bring to the steel industry?
Liu jie: in November 2017, The State Council issued the guidance on deepening the "Internet plus advanced manufacturing" to develop industrial Internet.Industry is the Internet connection, the whole industry chain, the whole value chain in the system, to support the key to the development of industrial intelligent infrastructure, is a new generation of information technology and manufacturing industry and new application pattern which is formed by the fusion depth, is the Internet from consumption to production areas, from the virtual economy to real economy development at the core of the carrier.
At present, the global industrial Internet is in a critical period of uncertain pattern and a window period of large-scale expansion. The development of industrial Internet has become a common choice for major countries to seize a new commanding height of global industrial competition and reshape the industrial system.Vigorously developing the industrial Internet is of great and far-reaching significance to the deep integration of the Internet and the real economy, the integrated development of mass entrepreneurship and innovation, primary, secondary and tertiary industries, large, small and medium-sized enterprises, and the building of a strong manufacturing country and a strong Internet country.
In my opinion, promoting the deep integration of the industrial Internet and the steel industry can promote the high-quality development of the entire steel industry in the following four aspects.
First, the deep integration of the industrial Internet and the steel industry can highly integrate resources and realize comprehensive links of total factors and the whole industrial chain, thus generating scale effect and synergy effect.
Second, the industrial Internet is deeply integrated with the steel industry, and relevant software analysis technology can be used to fully release the potential of the steel industry, so as to improve production efficiency.
Third, the deep integration of industrial Internet and the steel industry can effectively improve the level of intelligence of the steel industry, so as to meet personalized and diversified needs and improve the effective supply of the steel industry to a certain extent.
Fourthly, the deep integration of industrial Internet and the steel industry can help relevant departments and institutions to grasp the situation of the steel industry more comprehensively, so as to provide more accurate basis and reference for the government to formulate relevant policies and enterprises to make decisions.
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