The first industry-wide loss in the steel industry forced a new round of reshuffle during the year

The reporter learned from an authoritative source on the 29th that the large and medium-sized steel enterprises included in the statistical data of the China Iron and Steel Association had a total profit of 2.267 billion yuan in the first six months, an increase of 2.69% year-on-year, and a tax of 39.79 billion yuan, an increase of 1.49% year-on-year. In June, the steel industry once again suffered a loss in the entire industry. The losses of large and medium-sized steel companies that were included in the statistics of the Steel Association reached 699 million yuan.

It is worth noting that the profit margins of large and medium-sized steel companies included in the statistics from January to June were only 0.13%, and fell to -0.23% in June.

For the iron and steel industry, the situation of maintaining "micro-profits" for five consecutive months has once again become a "red light." According to the latest internal statistics of China Iron and Steel Association, the loss of large and medium-sized iron and steel enterprises was 36.5% in June, and there were 31 loss-making enterprises among the large and medium-sized steel companies that were included in the statistics of the Steel Association. From January to June, the cumulative loss of loss-making enterprises reached 40.07%.

In addition to this, some domestic steel mills, which are not included in the statistics, are still stuck in a loss-making quagmire. According to statistics, since 17 July, 17 listed steel companies have issued mid-year notices, including 3 medium-term advances, 1 first loss, and 6 consecutive losses. The company has accounted for nearly 60% of pre-drop companies. Another four listed steel companies have forecasted performance gains, and three have turned losses.

According to the authoritative sources, the dilemma of the steel industry is difficult to change. The main reason is that steel output remains high due to sluggish market conditions. In the event of oversupply, raw materials such as ore and coke are pushed up, while allowing Steel prices have been low or even below the cost line. "High inventory and difficult sales" have caused steel mills to run into trouble.

According to the latest data from the Statistics Bureau, from January to June, the country's crude steel production was 389.87 million tons, an increase of 7.4% year-on-year, an acceleration of 5.6 percentage points year-on-year; steel output was 516.96 million tons, an increase of 10.2%, an acceleration of 4.1 percentage points. Steel prices have continued to fall. In June, the domestic steel price index averaged 99.15, down 4.45 points from the previous month and down 16.72 points year-on-year.

The deputy general of a large and medium-sized steel plant in Hebei said on the telephone that at present, due to the tightening of the country’s credit policy and the adjustment of industrial policies, the “high-energy-consuming industries” are the first to be “opened”, and the steel mills are faced with the need to reform their environmental protection technologies. And investment, on the other hand also bear the credit pressure, coupled with sluggish sales of low steel prices, many steel mills have debt ratios of more than 90%, the capital chain is very tight.

Xu Xiangchun, my director of the Steel Network Information Department, said in an interview with the “Economic Information Daily” reporter that the entire steel industry will still face very severe tests in the second half of the year. On the one hand, although the economy is stabilizing and picking up, but real estate and other infrastructure construction will not rebound substantially, so steel demand will not be significantly improved; on the other hand, due to overcapacity, once the steel prices have recovered slightly, each steel mill The production will immediately rebound, and the “oversupply” status not only reduces the room for rising steel prices, but also increases the demand for raw materials, which objectively causes raw material prices to “easily rise and fall”.

"The continued downturn in an industry will force the industry to reshuffle." Xu Xiangchun said that since last year, the "winter" of the steel industry has first spread to traders in the middle reaches of the country. A large number of traders who previously made pours have become bankrupt. . At present, this situation has begun to spread to the steel mills, and some small steel mills have begun to go bankrupt because of the break in the capital chain. This signal is very worthy of attention. In particular, bank credit will be more cautious in the next step. If the steel industry continues to be in this downturn, some steel mills will inevitably go bankrupt due to capital chain breakage. Steel mergers and acquisitions will also be “warming up”. The increase will eventually form a new round of reshuffle in the steel industry.