The steel industry is facing a crisis of survival.

With the end of "golden 10 years" in China's steel industry, China's steel industry has entered a "cold winter", steel consumption has fallen, oversupply has been prominent, vicious competition has been fierce, prices have fallen, and industry losses have been severe. Although there were news two weeks ago that the price of iron ore had fallen to a new low, analysts at the time pointed out that the fall in iron ore prices had little effect on the profitability of steel companies, and they could only reduce losses and could not turn losses.

According to the 2016 China and global steel demand forecast results released by the Metallurgical Industry Planning and Research Institute on December 7, the actual consumption of steel in China was 668 million tons in 2015, down 4.8% year-on-year; the actual consumption of steel in China in 2016 was 648 million yuan. Tons, down 3% year-on-year. In 2015, global steel demand was 1.513 billion tons, down 2% year-on-year; in 2016, global steel demand was 1.499 billion tons, down 0.9% year-on-year.

In the face of multiple pressures of falling demand, overcapacity and low prices, steel companies are still struggling this winter.

Yesterday, a brokerage analyst said in an interview: "Now the survival of steel enterprises is facing enormous challenges. If you want to survive in this kind of dilemma, you can only fight from two aspects in the short term. Cost, now all steel companies have reached the stage of competition cost, whoever has low cost, who can survive; second, is the continuous flow of cash, if major shareholders, investors can get real gold and platinum to support steel enterprises, Steel companies can really survive."

However, for steel companies, "open source and reduce expenditure" is really difficult. In 2016, the national real estate market as a whole is still in a state of oversupply. Over-investment and over-inventory will remain the main contradiction of the industry. The newly-opened area and completed area of ​​housing will continue to grow negatively. However, the scale of railway investment is not diminished. The scale of urban infrastructure construction represented by urban rail transit construction, electricity, water supply and gas will continue to increase. The Metallurgical Industry Planning and Research Institute estimates that the steel consumption of the construction industry in 2016 was 350 million tons, down 2.8% year-on-year.

Judging from the current report of the steel enterprise annual report, the loss of Songshan Songshan is the most serious. The company expects the net profit loss in 2015 to reach 2.1 billion yuan, and Songshan Songshan will also face the pressure of ST.

"In the face of unfavorable situation, Songshan Songshan is actually trying to save itself." The brokerage analyst told reporters.

On November 17, the company issued a notice stating that it is proposed to evaluate the relevant assets, liabilities and net assets with an evaluation value of RMB 1.94 billion as the transaction consideration, and credited to the company's wholly-owned subsidiary Baosteel Special Steel Shaoguan Co., Ltd. The related business and personnel were also transferred to the special steel company.

In this regard, some analysts said that the company invested in the establishment of special steel company, the purpose is to promote the development of special production lines by pooling superior resources, in order to give greater play to the comparative advantages of special steel.

For the plight of steel enterprises today, industry insiders said that under the impetus of the national capacity replacement policy in the first half of the year, domestic small and medium-sized steel enterprises have experienced a wave of closure, but in contrast, domestic large steel enterprises are phasing out old capacity and upgrading product structure. In the process of reducing production, the effect of reducing production is not obvious, so the oversupply situation in the steel industry will remain at least two years.

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