Since the global financial crisis, the world steel market demand has been in a state of great contraction. The overcapacity of steel in the context of the economic crisis has become one of the most eye-catching phenomena in China's steel industry. Recently, data released by China Iron and Steel Association and other institutions show that domestic large and medium-sized steel enterprises have continued to decline in profits this year, much lower than the average sales profit rate of 5% in the industrial sector.
The author's investigation found that most of the steel enterprises that have survived the financial crisis in China have developed their own “side jobsâ€. These “side businesses†have provided certain profits for steel enterprises. This seemingly “inverted†approach indicates that the company is already preparing for the transformation and is no longer “taking steel as the key linkâ€. Although it still faces some problems, many steel companies have already solved the problem of overcapacity and high raw material costs. The puzzle has done some useful exploration.
When I mentioned the steel, I let Li Jian (a pseudonym) sigh and sigh. "Steel is like a chicken rib, it's useless, it's a pity to throw it." Li Jian said.
The steel mill of Li Jian has lost more than 50 million yuan this year, and the steel mill has been supported by its own “sideline†real estate profit of 200 million yuan.
Li Jian told the author, “Our own steel mill has a production capacity of more than 500,000 tons. It is also a bit well-known in the circle, but there is no 'sideline' support. It is hard to continue the steel industry alone. Not only private steel mills, but those If the big steel mill does not have a 'side job', the financial statements will be more ugly."
According to the author's investigation, it is found that the profits of domestic steel mills in the first half of the year are more from non-main business, and also bring related benefits to the layout of upstream and downstream and related industries.
According to the author's incomplete investigation, in the third quarter of this year, a number of steel mills listed on the steel industry have experienced a significant decline in profits. In the third quarter, Jigang lost 187 million yuan, Laigang shares lost 232 million yuan, Shougang's net profit fell 24.84%, and Baotou's net profit fell 96.9%.
China Iron and Steel Association data show that in May this year, the profit of large and medium-sized steel enterprises fell by 17.9% compared with that in April. In June, it was down by 37.77% from May, and in July it was down by 54.24% from June, and the profit in August was 38.15. 100 million yuan, down 67.55% over the same period of the previous year.
Steel mill profits are swallowed up by imported iron ore
BHP Billiton's pre-tax profit for iron ore in the previous fiscal year was as high as $6 billion. The 77 large and medium-sized steel enterprises that were included in the statistics from January to August this year realized a profit of 57.918 billion yuan, only 8.7 billion yuan.
"The steel consumption market has not recovered. From January to September this year, the price of imported iron ore has been rising again, forcing us to only increase prices, but steel can not be sold, which is the biggest reason for losses." Construction said.
Nearly 15,000 tons of steel produced by Li Jian's steel mills were pressed into the warehouses and traders of the factory.
In a "rice meal" organized by Li Jian, he invited the traders to "spoke the truth after drinking" and even begged Li Jian not to press the goods again to the traders, because the steel could not be sold at the current price.
Yang Siming, chairman and CEO of Nanjing Iron and Steel Group, said publicly: "I am most afraid of rising steel prices because our steel mills have fallen into the mine as a wage earner from the original boss."
According to the past practice, steel mills will get higher profits every time they raise the ex-factory price of steel. Now, with the “three major mining giants†changing the iron ore pricing mechanism at the beginning of the year, everything changes after the implementation of the quarterly index pricing.
A senior executive of Nanjing Iron and Steel said to the author that as long as the price increases, the price of imported iron ore will increase, and the price increase of iron ore is almost double the price increase of steel.
Also subject to higher import iron ore costs, Valin Steel's losses in the first three quarters reached 1.4 billion. Hualing Iron & Steel said that the main reason for the huge losses was the operating loss of Hunan Hualing Haoyuan Iron & Steel Co., Ltd., a holding subsidiary.
An analyst at the Hualing Steel Market Department revealed to the author that the cost of imported iron ore is difficult to control. Due to the failure to properly handle the iron ore supply relationship with the overseas iron ore suppliers in the past two years, the proportion of the long-term ore mine of Hualinghao Iron Ore has been reduced to about 40% year by year, and the cost of iron ore is obviously high. At the same time, in the second quarter, iron ore was purchased at the highest price of the year, and a large amount of iron ore was purchased and used in the third quarter, affecting the cost of iron ore in the third quarter.
From the performance of BHP Billiton, Rio Tinto, and Vale's three major mining companies this year, they have all received rich returns in the iron ore business. Only BHP Billiton's pre-tax profit for iron ore in the previous fiscal year was as high as $6 billion. The 77 large and medium-sized steel enterprises that were included in the statistics from January to August this year realized a profit of 57.918 billion yuan, compared with 8.7 billion yuan.
It is understood that the average price of imported iron ore in Australia in 2003 was 240 yuan per ton, this year was 1014 yuan per ton, domestic coking coal also rose from the original average of 300 yuan per ton to the current 1530 yuan per ton, but the average price of domestic steel Only 4263 yuan, only 1.15 times in 2005.
According to the data of China Steel Association, from January to August, 77 large and medium-sized steel enterprises that were included in the statistics realized a profit of 57.918 billion yuan, and the sales profit rate was 2.92%, which was much lower than the average sales profit rate of 5% in the industrial sector.
Recently, a number of steel mills revealed that they have received the latest quotation letters from Rio Tinto, BHP Billiton and Vale. The price of iron ore supplied from October has been lowered by 10%. This is the first time since the "three major mines" this year. Lower the price.
"If domestic demand does not pull up, the 10% reduction in mine prices alone will not save the steel companies." Lange Steel analyst Zhang Lin said.
An industry expert who did not want to be named also pointed out that iron ore prices soared before the price fell in the quarter. Even after falling prices, iron ore prices will still be nearly 120% higher than last year's level. Therefore, in the fourth quarter of this year, Chinese steel companies still have to consume the high-cost iron ore before, and the profitability of steel mills will not increase.
The author's investigation found that most of the steel enterprises that have survived the financial crisis in China have developed their own “side jobsâ€. These “side businesses†have provided certain profits for steel enterprises. This seemingly “inverted†approach indicates that the company is already preparing for the transformation and is no longer “taking steel as the key linkâ€. Although it still faces some problems, many steel companies have already solved the problem of overcapacity and high raw material costs. The puzzle has done some useful exploration.
When I mentioned the steel, I let Li Jian (a pseudonym) sigh and sigh. "Steel is like a chicken rib, it's useless, it's a pity to throw it." Li Jian said.
The steel mill of Li Jian has lost more than 50 million yuan this year, and the steel mill has been supported by its own “sideline†real estate profit of 200 million yuan.
Li Jian told the author, “Our own steel mill has a production capacity of more than 500,000 tons. It is also a bit well-known in the circle, but there is no 'sideline' support. It is hard to continue the steel industry alone. Not only private steel mills, but those If the big steel mill does not have a 'side job', the financial statements will be more ugly."
According to the author's investigation, it is found that the profits of domestic steel mills in the first half of the year are more from non-main business, and also bring related benefits to the layout of upstream and downstream and related industries.
According to the author's incomplete investigation, in the third quarter of this year, a number of steel mills listed on the steel industry have experienced a significant decline in profits. In the third quarter, Jigang lost 187 million yuan, Laigang shares lost 232 million yuan, Shougang's net profit fell 24.84%, and Baotou's net profit fell 96.9%.
China Iron and Steel Association data show that in May this year, the profit of large and medium-sized steel enterprises fell by 17.9% compared with that in April. In June, it was down by 37.77% from May, and in July it was down by 54.24% from June, and the profit in August was 38.15. 100 million yuan, down 67.55% over the same period of the previous year.
Steel mill profits are swallowed up by imported iron ore
BHP Billiton's pre-tax profit for iron ore in the previous fiscal year was as high as $6 billion. The 77 large and medium-sized steel enterprises that were included in the statistics from January to August this year realized a profit of 57.918 billion yuan, only 8.7 billion yuan.
"The steel consumption market has not recovered. From January to September this year, the price of imported iron ore has been rising again, forcing us to only increase prices, but steel can not be sold, which is the biggest reason for losses." Construction said.
Nearly 15,000 tons of steel produced by Li Jian's steel mills were pressed into the warehouses and traders of the factory.
In a "rice meal" organized by Li Jian, he invited the traders to "spoke the truth after drinking" and even begged Li Jian not to press the goods again to the traders, because the steel could not be sold at the current price.
Yang Siming, chairman and CEO of Nanjing Iron and Steel Group, said publicly: "I am most afraid of rising steel prices because our steel mills have fallen into the mine as a wage earner from the original boss."
According to the past practice, steel mills will get higher profits every time they raise the ex-factory price of steel. Now, with the “three major mining giants†changing the iron ore pricing mechanism at the beginning of the year, everything changes after the implementation of the quarterly index pricing.
A senior executive of Nanjing Iron and Steel said to the author that as long as the price increases, the price of imported iron ore will increase, and the price increase of iron ore is almost double the price increase of steel.
Also subject to higher import iron ore costs, Valin Steel's losses in the first three quarters reached 1.4 billion. Hualing Iron & Steel said that the main reason for the huge losses was the operating loss of Hunan Hualing Haoyuan Iron & Steel Co., Ltd., a holding subsidiary.
An analyst at the Hualing Steel Market Department revealed to the author that the cost of imported iron ore is difficult to control. Due to the failure to properly handle the iron ore supply relationship with the overseas iron ore suppliers in the past two years, the proportion of the long-term ore mine of Hualinghao Iron Ore has been reduced to about 40% year by year, and the cost of iron ore is obviously high. At the same time, in the second quarter, iron ore was purchased at the highest price of the year, and a large amount of iron ore was purchased and used in the third quarter, affecting the cost of iron ore in the third quarter.
From the performance of BHP Billiton, Rio Tinto, and Vale's three major mining companies this year, they have all received rich returns in the iron ore business. Only BHP Billiton's pre-tax profit for iron ore in the previous fiscal year was as high as $6 billion. The 77 large and medium-sized steel enterprises that were included in the statistics from January to August this year realized a profit of 57.918 billion yuan, compared with 8.7 billion yuan.
It is understood that the average price of imported iron ore in Australia in 2003 was 240 yuan per ton, this year was 1014 yuan per ton, domestic coking coal also rose from the original average of 300 yuan per ton to the current 1530 yuan per ton, but the average price of domestic steel Only 4263 yuan, only 1.15 times in 2005.
According to the data of China Steel Association, from January to August, 77 large and medium-sized steel enterprises that were included in the statistics realized a profit of 57.918 billion yuan, and the sales profit rate was 2.92%, which was much lower than the average sales profit rate of 5% in the industrial sector.
Recently, a number of steel mills revealed that they have received the latest quotation letters from Rio Tinto, BHP Billiton and Vale. The price of iron ore supplied from October has been lowered by 10%. This is the first time since the "three major mines" this year. Lower the price.
"If domestic demand does not pull up, the 10% reduction in mine prices alone will not save the steel companies." Lange Steel analyst Zhang Lin said.
An industry expert who did not want to be named also pointed out that iron ore prices soared before the price fell in the quarter. Even after falling prices, iron ore prices will still be nearly 120% higher than last year's level. Therefore, in the fourth quarter of this year, Chinese steel companies still have to consume the high-cost iron ore before, and the profitability of steel mills will not increase.
Guangzhou Yuquan Composite Material Co., Ltd , https://www.klyqfilm.com