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New edition of steel development guidance or the end of the year
The reporter was informed that the relevant departments of China are studying the guiding opinions on the development of the steel industry under the new stage. The guidance will be led by the National Development and Reform Commission, the Ministry of Industry and Information Technology, and other relevant associations. It is expected to be issued at the end of this year.
According to authoritative sources, on the one hand, the overall economic structure has been adjusted. On the other hand, changes in crude steel production capacity have prompted changes in the contradiction between supply and demand in the industry. Therefore, it is urgent to study the future development direction of the steel industry under the new economic environment.
Zhang Zhixiang, president of the All-China Metallurgical Chamber of Commerce, said that with the continued reduction of 30 million tons of production capacity this year, the steel industry will complete the previous reduction of 100 million to 150 million tons proposed in the “Steel Industry Adjustment and Upgrade Plan (2016-2020)”. The goal of de-capacity.
Zhang Zhixiang said that the development environment faced by the steel industry has not been the same as it was three years ago. The level of supply and demand has changed from a serious surplus to a relatively balanced one. The operating efficiency of enterprises has been reduced from a small profit to a reasonable profit level. stage.
Since 2016, China Steel has completed its capacity to produce 65 million tons in 2016, and then completed its capacity to reach 55 million tons in 2017. At the same time, it has completely encircled the “strip steel” operation and directly cleared 140 million tons of production capacity. Ton. This means that if the 2018 target of 30 million tons is completed, the total capacity of the steel industry will reach nearly 300 million tons.
“In the past two years, the production capacity of crude steel has been reduced by more than 20%, and the capacity utilization rate has increased from around 70% in 2015 to 80% in 2017, basically entering a reasonable range.” Zhang Zhixiang said. According to previous data from the Metallurgical Industry Planning and Research Institute, due to the domestic macroeconomic situation and the development of the main downstream steel industry, the actual total consumption of steel in 2017 was 725 million tons, up 7.7% year-on-year, compared with 8.32 crude steel output in the same year. The billion tons is basically in balance.
However, it is worth noting that since 2018, the impulse of steel enterprises to expand production capacity has been obvious. According to the China Steel Association, in the first quarter of this year, the country produced 212 million tons of crude steel, an increase of 5.4% year-on-year, and the average daily production of crude steel was 2,357,200 tons, the highest value in the same period in history.
"We must unswervingly resolve excess capacity, and resolutely guard against the resurgence of 'strip steel', prohibit new capacity, and implement capacity replacement." Liu Zhenjiang, secretary general of China Iron and Steel Association, said that steel enterprises are driven by profit in 2018. If the growth is too fast, it will increase the downward pressure on the market.
It is understood that in addition to consolidating the results of de-capacity, de-leveraging, preventing capital risks; accelerating the merger and reorganization of steel enterprises, further improving the concentration; the development of scrap steel industry, high-quality steel development, or the focus of the new version of guidance.
“The relevant departments are further researching ways to promote mergers and acquisitions.” Zhang Zhixiang said that the steel industry needs to increase resource integration, reduce and avoid homogenization competition, promote mergers and acquisitions, and form a number of steel groups with larger production scales. Further increase industrial concentration.
Zhang Zhixiang said, for example, supporting qualified enterprises to implement cross-regional and cross-ownership mergers and acquisitions may also provide certain support in terms of financial policies and enterprise land use.
It is also an important aspect of the future to take measures to speed up the de-leveraging of steel companies and prevent capital risks. Zhang Zhixiang said that Xu Lejiang, vice chairman of the National Federation of Industry and Commerce, pointed out during the investigation of the Chamber of Commerce that he should follow the central government's prevention of financial risks and actively reduce the leverage ratio and reduce the debt ratio of steel enterprises.
In the "Steel Industry Financial Work Symposium" held by the China Iron and Steel Association recently, Liu Zhenjiang also said that we are in the structural adjustment period, the production capacity structure has been significantly improved through the de-capacity, but other structural problems still need to be gradually resolved. An important point is that the capital structure is highly contradictory, and the asset-liability ratio is high, which causes a heavy financial burden.
Liu Zhenjiang said that the steel industry's goal is to reduce the average asset-liability ratio to below 60% after 3-5 years of hard work. In the past year, steel companies have actively taken leverage, and the average asset-liability ratio of the steel industry has dropped by 2.59 percentage points year-on-year, but it is still at a relatively high level, reaching 67.23%.
“In 2017, the interest expense of the steel industry alone reached 84.282 billion yuan,” Liu Zhenjiang said. The financial costs of steel enterprises are relatively high, and the debt restructuring of long-term loans and short-term loans has not yet been completed. From the average annualized capital cost rate, it rose from 5.06% in 2016 to 6.22% in 2017, and the annualized capital cost rate in March this year was raised to 7.22%, much higher than the one-year lending rate of banks. 4.35% level.
Liu Zhenjiang said that it will increase the level of debt disposal during the process of de-capacity, further coordinate and implement the debt-to-equity swap plan with banking institutions, promote cost reduction and efficiency increase, adjust investment strategies, and increase the proportion of direct financing to leverage.
“Despite the changes in the situation, the main contradictions and development pressures of the steel industry still exist.” Zhang Zhixiang said that there is still a gap between the quality stability, uniformity and performance of steel, service life and actual demand and expectations, which cannot meet the high modernization of construction. The higher demand for steel products in the quality economy system. In addition, Zhang Zhixiang pointed out that positioning the direction of enterprise development under the new situation, product structure, short-process steelmaking ratio, green friendly development, and application of information network technology also need to be discussed.