The Ministry of Industry and Information Technology released the 2010 steel industry operation situation and the outlook for 2011 on February 16. The Ministry of Industry and Information Technology predicts that steel production and consumption will maintain a growth trend in 2011, but the growth rate will slow down. At the same time, due to the high price operation, the overall level of domestic steel market prices is expected to Under the support of cost, it has increased from the previous year, but the benefits of the steel industry will not be significantly improved.
It is expected that the apparent consumption of crude steel will reach 630 million tons. The Ministry of Industry and Information Technology predicts that the apparent consumption of crude steel in 2011 will be 630 million tons, an increase of about 5% year-on-year; crude steel production will be about 660 million tons, a year-on-year increase of about 5%. In 2011, China's net export of crude steel is expected to remain unchanged from 2010, under the policy guidance that steel products meet the needs of the domestic market.
The Ministry of Industry and Information Technology indicated that from the demand point of view, the recovery of the world economy is still expected to slow in 2011, and economic growth will be sought in stability; the domestic economy will maintain a certain growth rate, and rigid demand will remain strong. Major downstream steel manufacturing industries such as construction, machinery, transportation, home appliances, shipbuilding and other downstream industries are still developing, providing a market space for the development of the iron and steel industry, and promoting the implementation of policies and measures such as joint reorganization, elimination of backwardness, energy saving and emission reduction, and industry regulation. Implementation will create favorable conditions for the stable operation of the steel industry and steel market.
However, the Ministry of Industry and Information Technology also pointed out that due to the increasing pressure on the adjustment of domestic economic structure, the intensity of steel consumption has declined; the international market is fierce, the export situation of steel products is not optimistic, and due to the large crude fuel still showing an upward trend, the cost of steel production will continue to increase. In the year, the steel industry will face a more severe situation in its production and operation.
The profitability of the industry is not optimistic. The Ministry of Industry and Information Technology predicts that iron ore prices will remain high in 2011, and China's imported iron ore will generally remain at around 600 million tons. The overall level of domestic steel market prices is expected to increase under the support of costs over the previous year.
The situation that the cost promotes the rise of steel prices has already been formed. On February 15, Baosteel Co., Ltd. (600019) announced that it will increase its steel prices in March, and the main varieties will be raised by RMB200-300/t. Baosteel's price increase is a response to rising raw material prices such as iron ore. In recent years, the price of domestic steel products has risen below the increase in raw material prices due to the significant increase in the prices of bulk raw materials, resulting in a continuous decline in the profitability of the steel industry. .
From the perspective of the profit of key large and medium-sized enterprises, since 2007, the profit rate of sales revenue has decreased year by year. From 2007 to 2009, it was 7.26%, 3.23%, and 2.46%, respectively. In 2010, it rose slightly to 2.91%, still far below the average level of 6.2% for industrial enterprises across the country. In particular, since May 2010, the level of profitability of enterprises has been declining month by month due to factors such as the rise in the price of raw materials such as ore, the oversupply of the steel market and the continued low level of fluctuations in steel prices. In 2010, large and medium-sized steel companies realized a profit of 89.7 billion yuan, of which profits of the top 20 companies accounted for about 83%, and a profit of Baosteel accounted for about 26%, while most enterprises were in a state of low profit or loss, and the overall profitability of the industry Not optimistic.
The Ministry of Industry and Information Technology predicts that under the dual role of the original high fuel price operation and the continuous fluctuation of steel prices in 2011, the profit margin of the steel industry will still be lower than the average level in the industrial sector.
In addition, the Ministry of Industry and Information Technology also stated that because China’s national conditions have determined that steel products are mainly based on domestic demand, the country does not encourage significant exports. In 2010, the adjustment of steel products’ export policies and the spread of international trade protectionism have made it difficult to export steel products in China. The space for using the international market to digest production capacity will be further reduced in the future.
As the pillar industry of China's national economy, real estate is also the largest industry for steel consumption in China. Its development and changes have a major impact on steel demand. After the Spring Festival, domestic steel products continued to rise "unprecedentedly." The steel market has fallen into a “strange circle†in which upstream costs, steel factory ex-factory prices, and spot trading prices are cyclically pushed up. However, the start-up of terminal demand has been extremely slow, and real estate has not been satisfactory.
It is expected that the apparent consumption of crude steel will reach 630 million tons. The Ministry of Industry and Information Technology predicts that the apparent consumption of crude steel in 2011 will be 630 million tons, an increase of about 5% year-on-year; crude steel production will be about 660 million tons, a year-on-year increase of about 5%. In 2011, China's net export of crude steel is expected to remain unchanged from 2010, under the policy guidance that steel products meet the needs of the domestic market.
The Ministry of Industry and Information Technology indicated that from the demand point of view, the recovery of the world economy is still expected to slow in 2011, and economic growth will be sought in stability; the domestic economy will maintain a certain growth rate, and rigid demand will remain strong. Major downstream steel manufacturing industries such as construction, machinery, transportation, home appliances, shipbuilding and other downstream industries are still developing, providing a market space for the development of the iron and steel industry, and promoting the implementation of policies and measures such as joint reorganization, elimination of backwardness, energy saving and emission reduction, and industry regulation. Implementation will create favorable conditions for the stable operation of the steel industry and steel market.
However, the Ministry of Industry and Information Technology also pointed out that due to the increasing pressure on the adjustment of domestic economic structure, the intensity of steel consumption has declined; the international market is fierce, the export situation of steel products is not optimistic, and due to the large crude fuel still showing an upward trend, the cost of steel production will continue to increase. In the year, the steel industry will face a more severe situation in its production and operation.
The profitability of the industry is not optimistic. The Ministry of Industry and Information Technology predicts that iron ore prices will remain high in 2011, and China's imported iron ore will generally remain at around 600 million tons. The overall level of domestic steel market prices is expected to increase under the support of costs over the previous year.
The situation that the cost promotes the rise of steel prices has already been formed. On February 15, Baosteel Co., Ltd. (600019) announced that it will increase its steel prices in March, and the main varieties will be raised by RMB200-300/t. Baosteel's price increase is a response to rising raw material prices such as iron ore. In recent years, the price of domestic steel products has risen below the increase in raw material prices due to the significant increase in the prices of bulk raw materials, resulting in a continuous decline in the profitability of the steel industry. .
From the perspective of the profit of key large and medium-sized enterprises, since 2007, the profit rate of sales revenue has decreased year by year. From 2007 to 2009, it was 7.26%, 3.23%, and 2.46%, respectively. In 2010, it rose slightly to 2.91%, still far below the average level of 6.2% for industrial enterprises across the country. In particular, since May 2010, the level of profitability of enterprises has been declining month by month due to factors such as the rise in the price of raw materials such as ore, the oversupply of the steel market and the continued low level of fluctuations in steel prices. In 2010, large and medium-sized steel companies realized a profit of 89.7 billion yuan, of which profits of the top 20 companies accounted for about 83%, and a profit of Baosteel accounted for about 26%, while most enterprises were in a state of low profit or loss, and the overall profitability of the industry Not optimistic.
The Ministry of Industry and Information Technology predicts that under the dual role of the original high fuel price operation and the continuous fluctuation of steel prices in 2011, the profit margin of the steel industry will still be lower than the average level in the industrial sector.
In addition, the Ministry of Industry and Information Technology also stated that because China’s national conditions have determined that steel products are mainly based on domestic demand, the country does not encourage significant exports. In 2010, the adjustment of steel products’ export policies and the spread of international trade protectionism have made it difficult to export steel products in China. The space for using the international market to digest production capacity will be further reduced in the future.
As the pillar industry of China's national economy, real estate is also the largest industry for steel consumption in China. Its development and changes have a major impact on steel demand. After the Spring Festival, domestic steel products continued to rise "unprecedentedly." The steel market has fallen into a “strange circle†in which upstream costs, steel factory ex-factory prices, and spot trading prices are cyclically pushed up. However, the start-up of terminal demand has been extremely slow, and real estate has not been satisfactory.
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