Off-season arrival of steel prices tends to turn hard

The recent news of the iron and steel-related news, and the price of the market, are all consistent downwards. Even if there is little hope, it will be drowned out in a dark cloud. The steel industry that was mentioned last month will have to be "back-stroked" successfully. It seems that it is only for the "protest road" before the downturn.

At the 8th China International Iron and Steel Conference, Xu Jiang, President of the China Iron and Steel Association, said bluntly: "Now steel companies are not subject to local expectations." According to statistical data, Tangshan's steel industry revenue in the first quarter of 2014 decreased by 11.01%, while Tangshan Not the only one. On the one hand, it shows that the solution of overcapacity and the elimination of outdated production capacity are powerful. It also proves that under this background, the steel industry continues to decline and the transition is difficult. On the other hand, it also implies local governments with the steel industry or overcapacity as the pillar industries. "Sadness" can also understand why Haixin stopped production 50 days after the local government abruptly violated previous claims and announced high-profile market rescue. The dependence of local governments on the steel industry is too strong. Different heroes of the GDP theory cannot be achieved by every city and city. At least in the current economic downturn, it is difficult to truly achieve this.

Everyone knows that the long-term prospects for the steel industry must be optimistic as long as the steel industry overcomes this major crisis. Xu Jiangle also said at the conference that “the future of steel is very good. The key is whether or not you can reach that day.” The data show that the steel industry set a new record in the first quarter of the new year since entering the new century. Losses in the entire industry, focusing on statistics, the company realized sales revenue of 888.8 billion yuan, profit of -23 million yuan, from loss to profit loss. The cumulative loss was 45%, up 14% year-on-year. In addition, the data released by the International Steel Conference shows that the utilization rate of China's steel production capacity is below 76%, and the excess production capacity has reached 180 million to 240 million tons.

Only the burden of the steel industry itself is heavy, it is difficult to make its huge body straight up, let alone to step forward, without a big step backward rolling is Ami Buddha.

The banking industry began to have a long-standing trend towards the steel industry last year. It goes without saying that the relationship between the two “brothers” has not eased much since the beginning of this year, despite the fact that “intermediaries” have come forward to reconcile. The most popular words recently popular in banks and steel companies are "drawing money." The first time the author saw this word, he jumped on his heart, and a bad feeling emerged spontaneously. It can be seen that steel companies are watching and listening to what it is like. Of course, only companies that have been "drafted" are allowed.

At present, the debt of the steel enterprises is about 3 trillion yuan, half of which are banks. This year, the bank has already pumped 10% of its loans and at least pumped down 140 billion yuan. According to this development trend, some steel companies have not been eliminated by the market and have also been “squeezed out” by banks. From the point of view of the overall development of the steel industry, the author supports this cross-industry “disposal” model.

For this model, industry experts have given their own views; drawing loans and raising interest rates have caused some companies to break the capital chain, and there is no risk of breakage. Bank lending is not because banks lack money, but because of upper-level policies. There were probably 100,000 steel traders in the country at one time, but the eco-chain of the industry may have gone through two years because the capital chain has been broken. This ring of traders does not exist.

Needless to say, the new environmental protection law, and if the bank's "drafting loans" clause continues, steel companies will have to drop one. Compared with the resolution of the overcapacity plan and the air pollution prevention action plan, this policy is the most direct and immediate. However, in the face of such a harsh and cruel mode of closure, the steel mills did not fear but instead produced as usual. In this way, the steel mills will minimize the ex-factory price in order to obtain funds, exchange funds for the amount, and plunder the limited market cash flow. For this reason, in a steel eco-chain that has a loop and a loop affecting the loop, while the spot steel price is being suppressed, the raw materials are also being downed, which is a vicious cycle. However, this is only a possibility, perhaps a factor that affects the market conditions of the steel market. This cycle cannot be stopped, as long as one of them is subjected to a strong pull, the cycle will turn. However, as far as the current situation is concerned, bad and pressure factors have been increasing and the steel price has remained relatively difficult to change in the short term.