According to the China Iron and Steel Association's production and operation seminar, the domestic large and medium-sized steel plants suffered a loss of 3.308 billion yuan, including a loss of 1.511 billion yuan in the first two months, and the loss increased in March to 1.797 billion yuan. Luo Bingsheng, executive vice president of the China Iron and Steel Association, said that the excessively high total steel production was the root cause of the oversupply of the market in the first quarter and the loss of the company.
It is understood that in the first quarter of the 72 large and medium-sized iron and steel enterprises in 20 losses, the loss reached 34%, while steel companies in the same period last year, the profit of 47.16 billion yuan. Luo Bingsheng disclosed to reporters that in the first quarter domestic crude steel production was 1,124,744 million tons, an increase of 1.74 million tons year-on-year; average daily steel production was 1,416,000 tons in the first quarter, equivalent to 517 million tons of steel production in the first quarter, which was significantly higher than the 2009 national planning index. 460 million tons; production volume showed a monthly increase, the output is still too high, the production of long products, pipe and railway materials increased, while the plate fell 7.68% year-on-year.
Luo Bingsheng said that at present, the steel price is consolidating at a low level and the price is even lower than at the end of last year, which is lower than the level of 1994. At the end of last year, social inventories were low. In the first quarter, due to the demand for social stocks, the purchases increased to form a market rebound, which led to the release of production capacity. In the first quarter, steel exports amounted to 5.14 million tons, a drop of 50%, and in particular, net imports were formed in March. The decline in the total amount of export resources transferred to the domestic market is an important reason for the oversupply in the domestic market.
It is reported that at present, the steel enterprises have achieved initial success in reducing costs. The cost of steelmaking has fallen by RMB 350/ton, domestic ore prices have dropped by 44%, and import mines have fallen by 26%. However, the price of coking coal has risen by 12%, and the price is still high. Luo Bingsheng pointed out that from the market situation, coking coal prices should be adjusted downwards.
The State Council recently held a meeting to study the development of the iron and steel industry. Minutes of the meeting pointed out that the steel industry revitalization plan will be implemented as soon as possible, and the domestic demand for steel products will be actively expanded, supplemented with the necessary technical means. The China Steel Association and the Ministry of Industry and Information Technology must work out a three-year plan to eliminate backward production capacity. Mergers and reorganizations, keeping the international market share of China Steel, further implementing fair taxation, strengthening import supervision and anti-dumping efforts, and protecting the domestic market.
China Steel Association Secretary-General Shan Shanghua stressed that steel companies should strengthen industry self-regulation, control production, organize production according to market demand, stabilize prices, and rectify and standardize the market order.
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