How long can steel make a good start: from inferior to the price of cabbage to hundreds of profits per ton of steel
after several years of cold winter, in 2017, China's steel enterprises opened their firepower and ushered in their own spring. Whether it is the revenue, profit or steel price of the enterprise, the word "rise" comes first
looking forward to the future, how long can this booming momentum be maintained? The durability of relevant policies and the degree of implementation have become important factors
the whole line is popular
"thanks to the blessing of the country, 2017 is very good, very good, very good, say important things three times, haha." Ding Hui (a pseudonym) said to new financial watch. As an executive of a private steel plant in Northeast China, although he is nearly half a century old, when it comes to the situation in the plant in 2017, his tone is still uncontrollably excited. Such excitement is rare in recent years
Ding Hui's life has been difficult since he became the top leader of the steel plant in 2010. "The whole industry has been bad for several years, and the salary of our senior executives is also linked to performance. At that time, it was really both laborious and the result was not good." Fortunately, since the second half of 2016, the whole industry has shown signs of recovery. That year, Ding Hui's factory turned losses into profits. By the end of 2017, "the profit had increased by at least 10 times compared with 2016." He said
not long ago, a video of "cash wall" used by a steel plant with high service life to send year-end bonuses to employees was uploaded. It makes the steel workers who have been neglected for many years elated. Behind it is also the huge profit of the steel plant
looking ahead, Chinese steel enterprises have taken on a new look at the beginning of 2018
public data shows that up to now, nearly 30 listed steel companies have issued annual report forecasts, of which only one continues to lose money, two reverse losses, and most of the rest increase in advance. It is estimated that more than 90% of the performance of listed steel enterprises in 2017 will be good news. Among them, Baosteel, the industry leader (11.100, 0.82, 7.98%), is expected to have a net profit of nearly 20billion yuan
"eating meat with strong ability and drinking soup with weak ability are basically profitable for the whole industry, which is the most exciting." In Ding Hui's view, although more profits can increase his salary, he pays more attention to the latter than the recovery of the whole industry. "The reason is very simple. If the whole industry is good, you will have the conditions for sustainable development. If the whole industry goes down, even if your enterprise makes a short-term profit, it will not last."
supply side effect
for Ding Hui's steel plant, such good results have been achieved in the past year, "the most important thing is to benefit from the supply side reform."
back in November 2015, at the 11th meeting of the central financial and economic leading group, the CPC Central Committee began to study economic structural reform and urban work. At the 12th meeting in January of the next year, the supply side structural reform plan began to be discussed in depth. In this context, the iron and steel industry, as the lifeline of the national economy, and compared with the industry in early 2016 to avoid large losses caused by loose fasteners, falling into overcapacity and even bad money driving out good money, naturally becomes the top priority of supply side reform
as a result, a series of measures such as eliminating backward production capacity, strengthening environmental protection supervision, and completely eliminating steel bars have been implemented. Take the ground steel as an example, "at present, the production capacity of more than 100 million tons of ground steel has been cancelled, which is quite large. The production capacity of the whole steel industry is only 800 million tons, so it is definitely a great benefit to the industry." Ding Hui introduced. Public data show that in 2017, China's iron and steel industry achieved a complete capacity reduction of 115 million tons, exceeding the bottom line of 100 million tons in five years, and only tens of millions of tons of capacity remain from the upper limit target of 150 million tons in the 13th five year plan. At the same time, the high fall in the upstream iron ore price has also helped steel mills reduce raw material costs to a large extent
of course, the measures taken by iron and steel enterprises to tap potential against standards, reduce costs and increase efficiency should not be ignored. For example, Ding Hui's steel plant "even copies documents on both sides, and sells waste paper after it is used up. These little things didn't care at all before, but now it's a big expense to save." He said
only when all these factors are superimposed together can the iron and steel enterprises recover. In Ding Hui's view, supply side reform is the foundation, otherwise it is difficult to achieve the current results by relying solely on the cost reduction of the enterprise itself
can it be sustained
from the "inferior to cabbage price" a few years ago to the current profit of several hundred yuan per ton of steel, is this a return of value or a foam? In my opinion, xuxiangchun, director of steel information, this belongs to the former
first, in the long run, the current steel price can automatically print the experimental report grid level (about 4000 yuan/ton) in a reasonable price range; Secondly, although the profit of the whole industry is higher than the best period in history, the 5% sales profit margin of the industry has not reached the historical peak of about 7%. Generally speaking, the data of sales profit margin is more rational and objective; Finally, even under the current situation, "the sales profit margin of the steel industry is not as good as the average sales profit margin of the national industrial industry, so there is still room for improvement in the future." Xu Xiangchun said to the new financial observation
however, there have been many such cases in history. As soon as the steel price rose and a little profit was made, steel mills began to try their best to increase production, and then fell into the dilemma of overcapacity again. Therefore, how long the current favorable situation can last depends largely on the continuity and implementation of the current policy
in fact, in the iron and steel industry, reducing production capacity and cracking down on steel bars are commonplace issues. Before the supply side reform, they were discussed almost every year, and there were many relevant policy documents. Just because the implementation was not enough and the implementation was not in place, the effect was not obvious, and even more restrictions were exceeded. In Xu Xiangchun's view, the supply side reform this time is true, "very determined, the policy is also very perfect, and the inspection and supervision are also in place, which is different from the past."
it is beginning to appear that the future policy will not be relaxed. On January 30, xinguobin, Vice Minister of the Ministry of industry and information technology, said at the press conference that the Ministry of industry and information technology would further sort out weak links, ensure that backward steel production capacity should be exhausted, strive to achieve the upper limit target of reducing crude steel production capacity by 150million tons in the 13th five year plan ahead of schedule, and put forward specific measures, including resolutely preventing the resurgence of ground steel, and strictly prohibiting new steel production capacity
it seems that the good days of the steel industry will continue