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It is urgent to create a new ecological iron and steel industry with orderly competition for transformation and upgrading. "In 2015, China's iron and steel prices fell sharply, and the weak shocks were adjusted. There was no fundamental change in the phenomenon of cost price inversion. The benefits continued to decline, the loss continued to increase, construction projects stagnated, production and operation were difficult, and the situation was very grim." Leipingxi, executive vice president of China Metallurgical and mining enterprises association, recently made the above statement in public

insiders predict that in 2016, China's iron and steel industry will face many difficulties and pressures. Although the demand market has been boosted to a certain extent, there is still a serious overcapacity, and the contradiction between overall supply and demand is difficult to reverse. We must be fully aware of this

overcapacity is the main reason

in 2015, the growth rate of China's major downstream industries of steel slowed down, and steel consumption was limited. As a result, steel output fell for the first time in 35 years. The iron and steel industry has experienced a real cold winter as a result of the same steps taken by the iron and steel enterprises to conduct 10 experiments to reduce production or stop production, and even the bankruptcy of individual enterprises. The macro change from prosperity to decline in the iron and steel industry at present, the background of aluminum alloy cable products in the market that are about 60% lower than the national standard copper cable price is that the national economic growth has changed from high speed to medium high speed, resulting in the shrinking demand for steel. Since 2015, China's economy has entered a stage of gentle decline, and the "troika" has slowed down one after another, directly affecting various terminal industries. With the continuous and in-depth adjustment of the global economy, the downward pressure on China's economy is enormous, the growth rate of fixed asset investment has dropped significantly, the growth rate of the steel industry continues to fall, and the steel market demand is not booming

the development of the iron and steel industry has a strong correlation with the speed of national infrastructure and industrial development. As China's iron and steel demand slows down, and there is no large enough market to offset the impact of China's market lag, the situation of excess supply is becoming more and more obvious

in fact, China's economic development is facing the problem of excess capacity, the most typical of which is the iron and steel industry. It can be said that excess capacity is an important reason for the downturn of the iron and steel industry. Among them, there are four main reasons for excess steel production capacity: first, in previous years, China's urbanization and industrialization were in a period of rapid development, which constituted the basic driving force for the rapid expansion of steel production capacity. Second, in the process of China's economic growth, the transformation from extensive growth to intensive growth has long been proposed, but this process has not been completely completed. In the past, the expansion of steel production capacity matched the extensive growth. Once the steel demand changed in stages, the problem of overcapacity would inevitably be exposed. Third, under the influence of local protectionism and the failure of overall capacity planning, a considerable part of the so-called "statistical extra capacity" has emerged, aggravating the problem of overcapacity. Fourth, steel "zombie" enterprises are unwilling to withdraw from production and play a certain role in it

overcapacity in various industries in China, including the iron and steel industry, is only a superficial phenomenon, and the underlying essence is the serious problem of product homogeneity. Therefore, the withdrawal of excess capacity is not based on the fact that enterprises stop production, reduce production or even close down, but to find the root causes, eliminate disadvantages and face the future. In fact, China's iron and steel industry has limited production for many years, but the effect is not obvious. Since 2008, although the government has successively issued a series of policies to resolve the contradiction of backward production capacity, one of the reasons why it has not been effective is that it is worried about the risk of centralized release of excess production capacity

transformation is imminent

at present, China's national economy is operating within a reasonable range, but there is still downward pressure. The driving force driving the growth of China's steel demand is declining, leading to difficulties in the steel industry. The industry has a loss of about 50% and a debt ratio of about 70%. The overall production and operation situation of the domestic steel industry is grim, and the transformation and development of the industry is imminent. From the analysis of various characteristics of the iron and steel industry, including output, demand, variety, structure, etc., it is generally judged that the life cycle of China's iron and steel industry is in the late stage of growth, in the consolidation period from growth to maturity, and the reform of the iron and steel industry has entered the deep-water area

at present, the downturn in the iron and steel industry is a correction to the extensive development in the early stage. At present, the transformation and upgrading of China's iron and steel industry has accelerated, enterprise integration has been broken, energy conservation and environmental protection have been greatly improved, steel exports have increased significantly, and iron and steel e-commerce has developed rapidly. However, the best way to resolve overcapacity is to speed up the cultivation of successor industries. In the process of industry reform and enterprise transformation, leading enterprises should actively seek breakthroughs to make their competitiveness more prominent. First, reduce costs, re evaluate the whole iron and steel industry chain, remove unnecessary costs, and focus on the big rather than the small; Second, adjust the product structure and pay attention to product differentiation; Third, build sales channels and cultivate dependent customers in the iron and steel industry; The fourth is to change the mode of production organization, from planning oriented to market-oriented; Fifth, there is no report that any automobile manufacturer has used its plate and strip to mass produce panel parts for export; Sixth, strictly control funds and improve risk awareness

2016 is the key year for China's iron and steel industry to get out of difficulties. Therefore, senior insiders suggest that the country should continue to introduce relevant supporting policies for the iron and steel industry in terms of energy conservation and emission reduction, intelligent manufacturing and internationalization strategies. At the same time, the steel industry itself needs to improve the market mechanism, speed up industrial transformation and upgrading, and create a new industry ecology of orderly competition and benign interaction. China's iron and steel industry needs to adapt to the new normal as soon as possible, truly embark on a road that conforms to reality and adheres to scientific development, and innovate ideas and technologies to achieve transformation and upgrading. Iron and steel enterprises should focus on the construction of institutional reform, structural optimization and factor upgrading. In particular, they should strive to implement technological innovation, improve total factor productivity, and actively seek new market space to resolve excess capacity

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