The first half of this year, the steel industry is facing a tough and complex market environment. Especially since the second quarter, the overall weak demand for steel, high prices of raw fuels, steel prices have fallen sharply, the economic benefits of enterprises have declined.
In this particular case, the steel industry adhere to the word stable, stable in seeking progress, to maintain a stable operating trend, increase the reform and innovation efforts, and focus on improving the quality of development. "We have the confidence, courage and ability to deal with all kinds of difficult challenges, consolidate and enhance the overall situation of the steel industry to continue to improve." Ministry of Industry and Information Technology, deputy director of the Department of raw materials industry, Zhang Haideng said.
The contradiction between supply and demand is more prominent
January to June this year, the national pig iron, crude steel production of 439 million tons, 527 million tons, down 4.7%, 6.5% respectively. Despite the year-on-year decline in steel production, but the contradiction between supply and demand in the market is still more prominent.
From the steel demand side, due to the sudden outbreak of epidemic in many places in the second quarter, the development of the national economy has been a major impact on the steel industry chain supply chain was affected by a large number of major downstream steel industry indicators of negative year-on-year growth, steel market demand is lower than expected. Market supply and demand mismatch led to high steel inventories. late June, steel inventories of key member companies in the CISA were 16.95 million tons, up 50% from the beginning of the year and 23.1% year-on-year; social inventories of five major varieties of steel in 21 cities monitored by the CISA were 12.52 million tons, up 58.9% from the beginning of the year and up 9.3% year-on-year.
Steel prices show a high fall trend. In the first half of the year, the China Steel Price Index (CSPI) average of 133.92 points, down 2.85% year-on-year. From the monthly situation, the first four months rose month by month, in May and June steel prices continued to decline. At the same time, the cost of raw materials continued to be at a high level. In the first half of the year, the purchase cost of iron ore fell, and the cost of coal and coke rose sharply. The average price of coking coal was RMB 2,956/ton, up 68.2% year-on-year; the average price of coke was RMB 3,099/ton, up 28.53% year-on-year.
Affected by the rising production costs and falling sales prices, the benefits of steel enterprises fell year-on-year. In the first half of the year, CISA member steel enterprises to achieve operating income of 3,339 billion yuan, down 4.65%; operating costs of 307.1 billion yuan, down 0.18%, the cost decline is less than the decline in operating income of 4.47 percentage points; total profit of 103.4 billion yuan, down 55.47%; average sales margin of 3.10%, down 3.53 percentage points. In the second quarter, member steel enterprises to achieve profits for three consecutive months of ringgit decline.
In the case of increased downward pressure, the overall asset position of the steel industry is still at a historically good level, the corporate gearing ratio fell year-on-year, and the debt structure continued to be optimized. at the end of June, the gearing ratio of CISA member steel enterprises was 60.87%, down 0.8 percentage points year-on-year; long-term bank borrowings of CISA member steel enterprises increased by 8.24% year-on-year, and short-term borrowings fell by 9.02% year-on-year.
Looking ahead to the second half of the year, steel demand is expected to bottom out and rebound. "Steel consumption in the third quarter, although there will not be a significant increase, but will show a gradual improvement on the basis of the second quarter." He Wenbo, executive chairman of the China Steel Association, said the effect of infrastructure investment will be clearly reflected in the third quarter, the overall state of the housing industry tends to stabilize, the shipbuilding industry has sufficient handheld orders, the auto industry production and sales are continuing to pick up.
