Steel prices rise, steel companies turn over
Over the past four years, supply-side structural reform policies have undoubtedly played a vital role in the entire steel industry. After four years of baptism, the supply-side reform of the steel industry has achieved remarkable results, the "ground strip steel" has been eliminated, and the construction steel production capacity structure has been optimized; the supply and demand of steel has been well improved, and steel prices and steel production have both risen. , China's steel industry has come out of the haze.
At the end of 2015, the Chinese government proposed that by 2020, the steel industry would reduce crude steel production capacity by 150 million tons. In 2016-2018, a total of 145 million tons of on-balance-sheet production capacity was reduced. In the first half of 2017, 140 million tons of ground steel were eliminated, and the total capacity reduction has exceeded 285 million tons. In 2019, the supply-side structural reforms continued to deepen, and the task of reducing steel production capacity was fully completed. And while the existing production capacity is being reduced, the new production capacity of the steel industry is also strictly controlled.
While the terminal demand is still relatively strong, the supply and demand relationship in the steel market tends to be tense, and the steel price has also seen a qualitative leap. According to the monitoring data of the Lange Steel Cloud Business Platform, the average price of tertiary rebar (Φ25mm) in ten major cities in China has climbed from 1,948 yuan/ton on January 1, 2016 to 3741 yuan/ton today, an increase of 92.04%; the highest point in the past five years was 4,893 yuan/ton on December 5, 2017, an increase of 2,945 yuan/ton, an increase of 151.26%.
With the rise in steel prices, the days of steel companies have gradually become more nutritious, from large loss-making households to large profit-making households. As can be seen from the statements released by several listed steel companies in July 2016, many steel companies have achieved a gorgeous turnaround, with profits turning from losses to profits. By 2018, all 20 listed steel companies including Ansteel, Valin Steel, Sangang Minguang and others have achieved profitability. It can be seen that the supply-side reforms have brought huge changes to the steel industry, and these changes are positive and have far-reaching effects.
Reforms continue to consolidate results
Although the goal of capacity reduction in 2020 has already been completed, the pace of supply-side reform has never stopped. On June 18, 2020, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other six departments jointly issued the "Notice on Doing a Good Job in Resolving Excess Capacity in Key Areas in 2020", which proposed to the steel industry to fully consolidate the results of capacity reduction and continue to deepen the supply side of the steel industry. Structural reforms, accelerating the disposal of "zombie enterprises", strictly controlling the total production capacity, and accelerating the promotion of high-quality development of the industry, etc.
The notice pointed out that although the current total capacity reduction task has been fully completed, systematic capacity reduction and structural superior capacity are beginning to show results, there are still some regions and central enterprises that have not yet completed the "13th Five-Year Plan" capacity reduction target, so it is necessary to coordinate Promote various tasks to ensure that the task of reducing production capacity is fully completed by the end of 2020. Therefore, this year we will fully implement the "Look Back" of the capacity reduction projects to ensure that the problems found by various inspections and self-inspections are rectified in time, and resolutely prevent the recurrence of the projects that have been withdrawn.
At the same time, we must continue to deepen the supply-side structural reforms in the steel industry. Further improve the iron and steel production capacity replacement method, strengthen the steel production capacity project filing guidance, and promote the scientific and rationality of the iron and steel project landing. To further promote the green development of the iron and steel industry, iron and steel enterprises implement mergers and acquisitions. It will also expedite the disposal of "zombie enterprises" determined and reported to the General Office of the State Council by the end of 2019 in accordance with laws and regulations, as well as the disposal of "zombie enterprises" in the steel industry that have been finalized and reported by the end of 2020.
In addition, it will strictly implement the "Notice on Improving Steel Capacity Replacement and Project Recording Work", suspend steel capacity replacement and project filing, and carry out self-inspection and self-correction work to ensure that steel projects meet safety, environmental protection, energy consumption, and quality , Land use, industrial policy and capacity replacement and other related requirements. Accelerate the promotion of high-quality development of the iron and steel industry, enhance the industrial basic capabilities and the modernization level of the industrial chain, and build a group of enterprise groups with strong international competitiveness. It will also strengthen supervision of violations of laws and breaches of trust, and implement incentive and punishment measures for breach of trust according to law.