Is the steel industry a good day?

"China Economic Weekly" reporter Guo Zhiqiang | Beijing report

"Now the steel industry is really difficult. Steel companies are facing multiple challenges such as high costs, weak demand, and decline in profits." In mid -August, Wang Fei, a person in the middle of the steel company, told the reporter of China Economic Weekly.

The latest data released by the National Bureau of Statistics show that the total profit of black metal smelting and extended industrial profit in the first half of this year decreased by 68.7%year -on -year. According to statistics from the China Iron and Steel Industry Association, in the first half of the year, the operating income of member steel companies decreased by 4.65%year -on -year; the total profit decreased by 55.47%year -on -year, and the average sales profit margin was only 3.10%.

Compared with the sharp profit of the steel industry in the same period last year, the profit of the steel industry has fallen sharply, and even some steel companies have suffered losses. What is the reason behind it? How to look at the steel market in the second half of the year?

The steel industry is facing severe situation

"The steel industry has faced the most severe situation since the development of production capacity." Zhang Haiden, deputy director of the Ministry of Industry and Information Technology, said at the fourth meeting of the 6th Member Conference of the China Iron and Steel Industry Association held on July 29. At the meeting, many industry experts said that the demand for steel markets in the first half of this year has declined significantly year -on -year, steel prices have fallen significantly, and raw materials costs are high, which has significantly declined the industry's benefits.

"After entering August, most of the steel companies have suffered losses. The main thing is that the project operating rate is not as expected, which has caused the weakening of the demand for steel." Wang Fei told the reporter of "China Economic Weekly" that the construction machinery large steel household , Sany Heavy Industry has begun to significantly compress the demand for steel, which is good to show the current steel market.

From the perspective of steel mills, at the end of June, the steel social inventory monitored by China Steel Association was 12.52 million tons, an increase of 4.64 million tons from the beginning of the year, an increase of 58.9%; an increase of 1.07 million tons over the same period last year, an increase of 9.3%.

In addition, the continued decline in steel prices has also increased the burden on steel companies. According to the monitoring of the Sino -Steel Association, as of the end of June, China Steel Price Index (CSPI) was 122.52 points, a decrease of 10.67 points from the previous month, a decrease of 8.01%; a year -on -year decrease of 20.96 points, a decrease of 14.61%. The first two weeks of July continued to decline, as of July 15 to 113.21 points, the lowest point since December 2020.

As the demand end of steel continues to weaken, the price of steel continues to fall, and the price of raw fuel is still high year -on -year, and the benefits of steel companies have further narrowed. According to a reporter from the China Economic Weekly, as of August 25, over 30 A -share steel companies have released the semi -annual report results announcement, and more than 20 steel companies are expected to decline significantly year -on -year from the first half of the year. Among them, many steel companies such as Anyang Iron and Steel, Bayi Iron and Steel, and Xining Steel pre -losing their losses in the first half of the year.

Public data shows that the net profit of most steel companies in the first half of this year has declined. Liu Gang issued an announcement that the net profit loss attributable to shareholders of listed companies in the first half of 2022 was about 957 million yuan. Anyang Iron and Steel issued a performance announcement. It is expected that the net profit attributable to shareholders of listed companies in the semi-annual 2022 year will be -750 million yuan to -950 million yuan.

On August 22, Zhang Feng, insider of a large -scale wide sheet steel enterprise, revealed to the reporter of China Economic Weekly that in July, the company is still a few profitable steel mills, but the entire production environment in August has changed a lot. There are uncertainty whether the monthly production tasks are completed.

A number of people who know the production of steel mills told the reporter of China Economic Weekly that under the circumstances of a large area of ​​domestic steel companies, it is still unknown whether the steel mill can make a profit in August. Factors affect production.

"The problem of the steel industry is inevitable"

In the first half of 2021, the steel industry was still very good. According to the China Steel Association data, the national key statistics of steel companies' operating income of 3459.4 billion yuan, a year -on -year increase of 51.5%; the total profit was 226.8 billion yuan, a year -on -year increase of 2.2 times.

For a year, the domestic steel industry has undergone tremendous changes. In the investor exchange meeting, Hua Ling Iron and Steel revealed that in order to ensure that the national crude steel output declined year -on -year in 2022, the relevant ministries and commissions proposed key regions such as Beijing -Tianjin -Hebei and surrounding areas, the Yangtze River Delta region, and Fenwei Plain. Steel output, focusing on low -steel output with poor environmental performance levels, high energy consumption, and relatively backward process and equipment level. In the second half of the year, the supply side of the steel industry is limited or will be normalized.

Recently, a China Steel Association analysis report pointed out that the main problem of the steel market is currently on the demand side of the steel, but the real solution is on the steel supply side. Request recovery behind production is the fundamental reason for the continued decline in the price of this round of steel.

According to reporters from "China Economic Weekly" sorting out the disclosure of the first half of the performance preview of each steel company, the significant decline and losses were mainly affected by the following factors: affected by the new coronary pneumonia's epidemic, Russia and Ukraine conflict, etc. Complex and severe, the demand for the steel industry is weak, and the inventory rises; the international commodity market fluctuates, and the price of iron ore runs high, especially the price of coking coal has increased sharply compared with the same period of the previous year. In the context of strong demand and weakness, the fundamentals of steel gradually deteriorated, and the overall steel prices were weakened; the rapid decline in steel prices in the later stages of the second quarter exacerbated the difficulty of steel companies.

As the "one brother" of the steel industry, Baosteel has long judged the steel pattern in 2022. "In 2022, the steel industry still faces the problems of tightening energy environment constraints, increasing the fluctuations of raw auxiliary materials, and continuous high operation. Energy consumption 'dual control' will still be the hard requirements of the development of the steel industry. The development of green and low -carbon will be the key task that the steel industry must continue to advance in the future. " At this meeting, He Wenbo, Secretary of the Party Committee and Executive President of the China Steel Association, shared a point of view with you: "The problems in the market today did not happen suddenly, not accidental, nor the 'black swan', which is inevitable."

He Wenbo believes that with the development of China's economy and society, China's urbanization and industrialization gradually mature, and the total demand for steel is gradually declining. It is an inevitable process. This industry should have consensus. From this point of view, it should also be prepared.

Can Subsidate Steel become a performance support point?

It is worth noting that although most steel companies have declined to varying degrees, the subdivisions of some steel companies still provide support for steel companies' profitability.

The Sinosteel Association believes that steel companies should pay attention to and adapt to changes in the demand structure of steel products.

In the first half of 2022, some of CITIC Special Steel demand was strong. From the perspective of subdivided varieties, high -end gear steel, bearing steel, work mold steel, spring steel and high -temperature alloy, new energy steel and other key varieties still have more room for growth.

In the first half of the year, according to the weakening of the demand for some downstream industries, CITIC Special Steel adjusted the variety structure in a timely manner, and used the advantages of the six varieties to improve the downstream pressure caused by the sales of new energy industries and export -related products to respond to changes in downstream demand. In the first half of the year, the sales of steel were 7.68 million tons, of which 820,000 tons were exported, a year -on -year increase of 12%, and the export business revenue increased by 50%year -on -year (including entrusting the export of Xinye Steel).

However, steel companies in some regions have the needs of market segments, but they have encountered the problem of "electricity consumption". The price of production electricity has soared to 21.9 yuan per degree, bringing huge cost pressure to some steel companies.

"Beginning in mid -August, in order to ensure people's livelihood electricity, the influence of power tension factor has a huge impact on steel mills. It turned out that the price of normal production electricity was only 4 yuan per kWh, but now the electricity price of steel mills has risen to 21.9 yuan, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree, and each degree,, and each degree,,, and each degree,,, and each degree,, and each degree, The production time is from 10 am to 1 pm. "In mid -August, Yu Ren, a person inside a steel pipe manufacturer, told the China Economic Weekly reporter that the steel mill has stopped production for a week. In view of the current situation, the steel mill may be in August that the steel mill may be possible in August. Losses.

Affected by the rise in international oil prices, the demand for the market demand for the market for drilling, pressure vessels and transportation pipeline pipelines produced by the above steel pipe enterprises is active. In the first quarter of this year, enterprise export sales increased by nearly 15%year -on -year.

"At present, due to electricity problems, steel companies can only scientifically dispatch production time, and the production of steel rolling may be partially stopped." During the interview, many insiders of steel companies told the reporter of China Economic Weekly that due to the continuous high temperature in China, high temperatures in China continued to high temperatures in China , Residents 'electricity is high, and for the power consumption of people's livelihood, some steel enterprises' power consumption needs have been suppressed. Some personnel of some enterprise agencies require home office. Dare to open.

(At the request of the interviewees, Wang Fei, Zhang Feng, and Yu Ren were a pseudonym)

Responsible editor | Guo Yiyao

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