Steel enterprises need to face long-term adjustment

This year, the overall operation of the steel industry is still difficult. The data shows that from January to July, China's crude steel output increased by 7.1% year-on-year, compared with 2.1% in the same period last year. The incompatibility between the rapid release of production capacity and the slow growth of demand has led to oversupply in the market and a meager profit situation. From January to July, the industry's average sales profit margin was only 0.23, and the main business was still on the verge of loss. The current micro-profit situation in the steel industry is the result of a combination of long-term expansionary development methods and extensive management models. Three feet of freezing, not a cold day, the complexity of the cause and the changes in the domestic situation determine the difficulty will exist for a long time. I am afraid this period will last for 5 to 10 years. At the high-end forum on China's steel technology economy held recently, Xu Kuangdi, former president of the Chinese Academy of Engineering and chairman of the China Institute of Metals, said. Xu Lejiang, president of China Iron and Steel Association and chairman of Baosteel Group, also said that the entire steel industry has not yet reached the minimum period. It only entered the autumn season, and the real winter has not yet arrived. The pattern of overcapacity in steel production cannot be fundamentally changed in the short term. The challenges facing steel companies in the next 10 years will be growing. The cost of production factors continues to rise, and the pressure on environmental resources is increasing. The economic situation has forced steel companies to shift from a large-scale fixed-asset investment to meet the market demand for extensive growth, and to a development model based on structural adjustment, transformation and upgrading. At present, China is already in a period of economic transition, the growth of steel demand has slowed down, and the world economy is in a slow recovery period. Therefore, both domestic and international markets are more than demand. At the same time, due to the manufacturing capacity of steel equipment, strong construction strength, and a significant reduction in investment costs, the steel industry has changed from a difficult-to-reach industry to an easy-to-reach industry, which greatly enhances the ability to rapidly increase steel production. Even if there is a spike in demand growth in the market, it will be quickly filled by the existing capacity and new capacity. Therefore, defusing overcapacity in the steel industry will be a must for the steel industry in the current and future period. China's steel overcapacity has structural characteristics, that is, backward production capacity and general horizontal production capacity account for a large proportion. Low production capacity, low equipment consumption, high energy consumption, heavy environmental pollution, inadequate energy conservation and environmental protection measures, and lack of competitiveness should be eliminated as soon as possible. In this regard, Xu Kuangdi suggested that the de-capacity of China's steel industry should be combined with administrative means and market-oriented means. First of all, the green certification and market access system for steel production capacity should be established in accordance with national environmental protection standards. The blast furnace and electric furnace volume, steel product variety and enterprise scale should no longer be used as the standard for eliminating backward production capacity. Secondly, the energy conservation and emission reduction targets of steel enterprises should be strictly regulated. On the basis of this, the ladder environmental tax is levied according to the level of emissions. Most of the environmentally unsatisfactory enterprises are small and medium-sized steel enterprises. They can consider all environmental protection taxes as provincial fiscal revenues, and strengthen the main role of provincial governments in eliminating backward steel production capacity.

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