Related materials from the Department of Raw Materials of China's Ministry of Industry and Information Technology said on January 3rd at the 2nd China Iron and Steel Logistics Cooperation Forum that the Chinese steel industry is facing a large area of ​​production cuts, losses in the entire industry, a large increase in inventories, and an inverse cost and price In the four aspects of difficulties, in response to new changes in industry trends, we should actively respond to such measures as tapping potential and increasing efficiency, linking production and demand, and supporting technological transformation of enterprises.
Jia Yinsong, Inspector of the Department of Raw Materials of the Chinese Ministry of Industry and Information Technology, said that the growth rate of China's steel industry has dropped sharply, and companies have reduced production in large areas. In the first 11 months of 2008, the production of steel only increased by 2.6% year-on-year, and the growth rate dropped by 14.2%. . The average daily production level in early November was 31.5% lower than that in June.
Steel prices fell sharply and the industry suffered losses. Compared with June 2008, the average price of the currently representative 6.5-mm standard general-purpose line product has dropped by 40.6%; the average price drop for the 2.75-mm-format hot-rolled coil sheet is as high as 43.9%. In October 2008, the industrial loss reached 59%.
Steel industry stocks increased significantly, and capital turnover was difficult. As prices continued to drop, market demand plummeted, resulting in a sharp increase in finished product inventories. At the end of September 2008, the amount of steel stocks held by steel companies increased by 45% year-on-year. At present, domestic ports and iron and steel enterprises still have 120 million tons of imported high-priced iron ore. The average price is about 110 US dollars per ton, which is 40 US dollars higher than the current price. In October 2008, the balance of account receivables and payables of key steel companies increased by 42.6% and 50.1%, respectively.
Because high-priced ores are difficult to digest, the cost and price of the steel industry are upside down. Although the current domestic fuel prices have generally declined, the stocks of raw fuel that are purchased at high prices by large steel backbone enterprises are relatively sufficient and will be difficult to digest in the short term. In addition, 60% of imported iron ore is a long-term agreement ore, which is basically held by large-scale iron and steel enterprises. Large steel enterprises also signed a long-term contract price while signing a long-term mine. At present, the freight rates for Brazilian and Australian ore mines have dropped from the highest of US$108 and US$51 per ton in the first half of 2008 to the current US$8 and US$4, respectively, while the long-distance freight rates are US$22 and US$11 respectively.
Jia Yinsong said that the industry trend of the steel industry has undergone new changes, mainly due to the decline in global steel demand, the obstruction of China's steel exports, the obvious weakening of domestic demand in China, the apparent consequences of overcapacity, and the lack of market rules leading to unregulated competition. In response to these changes, the steel industry should take measures to respond, including: in-depth development of potential and efficiency, efforts to reduce production costs; strengthen industry self-regulation, standardize the market order; according to market demand, the implementation of production and demand linkage; around the key construction projects, timely adjustment of products The structure will accelerate the adjustment of industrial structure, actively support the technological transformation of enterprises, and increase the support for projects such as the recovery of waste heat, the development of low-grade refractory ore, and the promotion of energy conservation, emission reduction, and comprehensive resource utilization projects.
Jia Yinsong, Inspector of the Department of Raw Materials of the Chinese Ministry of Industry and Information Technology, said that the growth rate of China's steel industry has dropped sharply, and companies have reduced production in large areas. In the first 11 months of 2008, the production of steel only increased by 2.6% year-on-year, and the growth rate dropped by 14.2%. . The average daily production level in early November was 31.5% lower than that in June.
Steel prices fell sharply and the industry suffered losses. Compared with June 2008, the average price of the currently representative 6.5-mm standard general-purpose line product has dropped by 40.6%; the average price drop for the 2.75-mm-format hot-rolled coil sheet is as high as 43.9%. In October 2008, the industrial loss reached 59%.
Steel industry stocks increased significantly, and capital turnover was difficult. As prices continued to drop, market demand plummeted, resulting in a sharp increase in finished product inventories. At the end of September 2008, the amount of steel stocks held by steel companies increased by 45% year-on-year. At present, domestic ports and iron and steel enterprises still have 120 million tons of imported high-priced iron ore. The average price is about 110 US dollars per ton, which is 40 US dollars higher than the current price. In October 2008, the balance of account receivables and payables of key steel companies increased by 42.6% and 50.1%, respectively.
Because high-priced ores are difficult to digest, the cost and price of the steel industry are upside down. Although the current domestic fuel prices have generally declined, the stocks of raw fuel that are purchased at high prices by large steel backbone enterprises are relatively sufficient and will be difficult to digest in the short term. In addition, 60% of imported iron ore is a long-term agreement ore, which is basically held by large-scale iron and steel enterprises. Large steel enterprises also signed a long-term contract price while signing a long-term mine. At present, the freight rates for Brazilian and Australian ore mines have dropped from the highest of US$108 and US$51 per ton in the first half of 2008 to the current US$8 and US$4, respectively, while the long-distance freight rates are US$22 and US$11 respectively.
Jia Yinsong said that the industry trend of the steel industry has undergone new changes, mainly due to the decline in global steel demand, the obstruction of China's steel exports, the obvious weakening of domestic demand in China, the apparent consequences of overcapacity, and the lack of market rules leading to unregulated competition. In response to these changes, the steel industry should take measures to respond, including: in-depth development of potential and efficiency, efforts to reduce production costs; strengthen industry self-regulation, standardize the market order; according to market demand, the implementation of production and demand linkage; around the key construction projects, timely adjustment of products The structure will accelerate the adjustment of industrial structure, actively support the technological transformation of enterprises, and increase the support for projects such as the recovery of waste heat, the development of low-grade refractory ore, and the promotion of energy conservation, emission reduction, and comprehensive resource utilization projects.
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