Chat with us,powered by LiveChat

Translation

EnglishAfrikaansالعربيةDeutschEspañolFrançaisItaliano日本語РусскийภาษาไทยTürkçeاردو中文(简体)
 Edit Translation
by Transposh - translation plugin for wordpress

The steel industry faces the dual pressure of cost and transformation

The steel industry faces the dual pressure of cost and transformation

The steel industry faces the dual pressure of cost and transformation

Source: China economic times

Recently, the China iron and steel association released the operation of the steel industry in january-july, data show that in July, the growth rate of steel production slowed down significantly, steel prices are relatively stable, due to high raw material costs, steel enterprises benefit has declined.Experts believe that steel enterprises facing rising costs and upgrading the dual pressure.

Crude steel production quarter – on – quarter reduction import iron ore increased significantly

In July, China produced 68.31 million tons of pig iron, 1.83 million tons less than the previous month; 85.22 million tons of crude steel, 2.31 million tons less than the previous month; and 105.82 million tons of steel, 1.28 million tons less than the previous month.The daily output of crude steel in China was 2.7491 million tons, down 168,600 tons or 5.78% from June.

From January to July, China produced 473 million tons of pig iron, a year-on-year growth of 6.74%, the production of raw steel 577 million tons, a year-on-year growth of 9%, the production of steel 698 million tons, a year-on-year growth of 11.23%, compared with the growth of January to June.Among them, the crude steel production of member enterprises increased by 5.38% year-on-year, and the crude steel production of non-member enterprises increased by 20.9%.The output growth rate of non-member enterprises is much higher than that of member enterprises.

In terms of import and export, from January to July, China exported 39.97 million tons of steel, down 2.9 percent year-on-year.Among them, 5.57 million tons of steel were exported in July, up 4.9 percent month-on-month.From January to July, China imported 6.664 million tons of steel, down 13.4% year-on-year.Among them, the import of steel in July was 842,000 tons, down 10.9% month-on-month.The net export of steel in July was 4.728 million tons, up by 367,000 tons or 8.42%.From January to July, the cumulative net export of steel was 33.305 million tons, which was 180,000 tons lower than the same period last year, down 0.54%.

From January to July, China imported 590 million tons of iron ore, down 4.9% year-on-year, among which 91.01 million tons were imported in July, up 15.83 million tons or 21.06% month-on-month.At the end of July, the inventory of imported iron ore ports increased to 116.42 million tons, up 770,000 tons or 0.7%.

China imported 91.017 million tons of iron ore in July, up 1.2 percent from a year earlier and 21 percent from June, according to the general administration of customs.Industry analysts said this is due to Australia and Brazil’s iron ore shipments to China is gradually recovering.In addition, shipments of iron ore from Brazil to China in June were delayed until July, triggering a one-month rebound in import growth.

Steel prices are relatively stable year-on-year decline

At the end of July, the China steel price index (CSPI) was 109.50 points, up 0.05% month-on-month, with the long material index down 0.08% and the board index up 0.01%.From the variety, the cold rolled sheet price performance is stable, in other varieties of prices have declined to maintain the fluctuation of the trend.From January to July, the CSPI composite index averaged 109.48 points, down 4.54 points or 3.98% year-on-year.The July average was 109.90, up 0.91 points or 0.83% from the previous month.

In July, the CRU international steel composite price index was 160 points, down 1.8 points, or 1.1%, which continued to decline month-on-month.That was down 35.3 points, or 18.1%, from a year earlier.Among them, CRU longwood index was 177.6 points, down 2.1 points, or 1.2%;The CRU board index was 151.2 points, down 1.7 points, or 1.1%, which was 5.5 percentage points narrower than that in June.Compared with the same period last year, the CRU long material index fell 19.5 points, or 9.9%.CRU board index dropped 43.2 points, a decrease of 22.2%.

In terms of sales, from January to July, member steel enterprises achieved sales revenue of 2.43 trillion yuan, up 9.75% year-on-year;The cost of sales was 2.17 trillion yuan, up 14.4% year on year. The increase of cost was larger than the increase of revenue.Total profit reached 123.582 billion yuan, down 23.93% year-on-year;Sales profit margin 5.09%, down 2.25 percentage points year-on-year.Cisa believes that the sharp decline in profits is mainly due to the rise in raw fuel prices.From January to July, the purchasing cost of domestic iron ore increased by 19.88% year-on-year, imported ore by 29.13% and scrap steel by 10.03%.At the end of July, the asset-liability ratio was 63.95%, down 1.41 percentage points year-on-year.

Experts believe that steel enterprises facing rising costs and upgrading the dual pressure.At present, the operating cost of steel related enterprises mainly includes labor cost, fuel material cost and logistics cost.As the demographic dividend disappears, so does the labor cost advantage.Due to the bulk of raw materials in commodities, negotiations are difficult;In order to reduce the comprehensive cost, it is necessary to improve the operation efficiency.

In the view of experts, China’s iron and steel industry urgently needs to improve the ability to negotiate iron ore prices, and is also facing the pressure of transformation and upgrading, so smart and big data will become one of the key development directions in the future.