Nowadays, in the field of steel circulation, there is such a saying: "One kilogram of steel is not as expensive as a cabbage." "Selling a ton of steel is not as good as selling a bottle of wine." Steel traders complain that steel prices are low, but they cannot make money. This seems to be a new phenomenon in the domestic steel market.
According to the introduction of steel traders, the price of ordinary grade rebar and high wire on the market has dropped to about 4,000 yuan/ton, and the price of one kilogram of steel is only 4.0 yuan. At present, the cabbage in the farmer's market is mostly 4 kilograms. Above, the price is about 4.5 yuan. In other words, the price of one kilogram of steel is not as good as a Chinese cabbage. In Shanghai, some steel traders switched to selling wine, and some steel bosses set up liquor companies to specialize in old wines. The boss here said that selling a bottle of red wine can earn tens of dollars, selling Maotai (600519, stocks), making more money, and selling steel can not make much money, and even lose money, why bother.
“One kilogram of steel is not as expensive as a cabbageâ€, what does this mean? Indeed, the deep-seated problems of this phenomenon deserve to be reflected by the steel industry. Since the beginning of this year, the steel market prices have fallen frequently. From mid-to-late April to the end of May, the prices of rebar and wire rods have dropped by 200-300 yuan/ton. On May 31, the offer price of Hubao's 16mm-?25mm grade rebar in the Shanghai market fell to 3,860 yuan / ton, setting a new low in recent years.
The price of steel continued to fall, and the number of innovations was low. The reason was that there was excess supply, insufficient demand, imbalance between supply and demand, and oversupply, forcing steel prices to fall again and again. This is the law of the market economy. The formation of this situation, in the final analysis, is the current overcapacity of steel, steel mills rather than price, not willing to reduce production, price reduction does not reduce, lose money to the city, steel mills in order to maintain "market share", have a place, not easy Reduce production. According to the latest statistics of the China Iron and Steel Association, the national crude steel output forecast for the first half of May was 2.0453 million tons, an increase of 0.51% from the end of April, a record high. The daily output of crude steel in June may remain at a record level of about 2 million tons. Due to the huge capacity of China's steel industry, any reduction in production is limited. The overall operating rate of steel mills has not been affected by the rapid decline of market prices, and the operating rate is still at a relatively high level.
The production capacity of steel mills is released, and the output growth far exceeds the growth of demand. The market is unbearable and the price will fall. The Chinese cabbage is not the same, so planting the area, encountering natural disasters, the harvest is reduced, and the price is bound to rise. According to data released by the National Bureau of Statistics on June 9, the national consumer price level (CPI) in May rose 3.0% year-on-year (compared with the same period last year) and decreased by 0.3% from the previous month. Among them, the price of fresh vegetables rose by 31.2%, which is the largest increase in food. Therefore, one kilogram of steel is not as expensive as a Chinese cabbage. If you don’t blame anything, you will complain that there is a serious excess of steel production capacity. Today, the domestic crude steel production capacity reaches 900 million tons, and the demand is full, and it is only 700 million tons. If there is a surplus of 200 million tons, it will be sold at a reduced price. There is a saying that "the production capacity is like a sword, hanging on the steel market", the production capacity is fully released, and the steel market will suffer.
Indeed, the steel production capacity that has already been formed is not difficult to release. The investment of billions and billions of dollars has gone down. The blast furnace and the converter have been built. Can it be put into production, where is it idle, can it be done? Moreover, once the blast furnace is ignited, it is difficult to stop the furnace. Because the blast furnace is continuous large-scale production, it can't be extinguished in the middle of the furnace, re-igniting and opening the furnace, the cost is up to several million. When it is not necessary, the steel mill will not easily extinguish the blast furnace. In the case of less serious losses, steel mills tend to reduce production by reducing the amount of feed, and will not shut down the blast furnace. Therefore, it is difficult to curb the release of the already built capacity. The most effective control of production capacity is that blind expansion and new capacity, especially homogenized repetitive capacity, should be controlled at the source to blindly expand.
Eliminate outdated production capacity, control new capacity, do not build repetitive capacity, play high-tech production capacity, can only control the production capacity, adjust it well, the output will fall, the contradiction between supply and demand will ease, then there will be no steel price is too big The phenomenon of expensive cabbage.
However, the repeated construction of the current production capacity and the expansion of the homogenization capacity of steel traders are not effectively controlled. Even for high-end steel, its homogenization capacity expansion and homogenization competition are still very serious and fierce.
People from the China Special Steel Enterprise Association called for the high-end special steel production capacity not to be rushed to the blind. In recent years, the phenomenon of blind expansion of high-end special steel production capacity has emerged in China, resulting in oversupply of products. In terms of special-purpose large-diameter seamless steel pipes with a diameter of more than 245mm, according to preliminary statistics, as of 2010, there are more than 20 production lines in the country, with a capacity of more than 5.5 million tons. In 2011, 10 new production lines were produced. 3 million tons, it is estimated that in 2012, there will be 4 new production lines with a capacity of 2.5 million tons. By then, there will be 11 million tons of production capacity nationwide. In just two years, capacity has increased by 100%. According to relevant experts, the actual annual demand in recent years is less than 4.5 million tons.
According to incomplete statistics, as of the end of 2010, there are 11 production lines in the country with a production capacity of about 5 million tons. The new production in 2011 is based on the incomplete statistics. There are 4 production lines with a production capacity of 2 million tons. In 2012, 4 production lines will be newly built or rebuilt, with an additional capacity of 2 million tons. The demand is less than 5 million tons, and the serious supply exceeds demand.
The investment in the construction of these high-end special steel production lines is very large. One production line is at least several hundred million or even larger. Some have not been built, but they cannot form mass production, or they cannot produce production capacity. A big reason here is overcapacity. Supply exceeds demand, leading to fierce competition, mutual squeeze, and investors and production companies. In fact, the demand for high-end special steel is limited. High-end special steel is at the tip of demand, and its demand is not very large. Overcapacity, demand can not keep up, so the price competition of high-end special steel is getting more and more hot, high-end special steel can not sell high prices, and even sell one ton a loss of one ton.
From this point of view, the phenomenon that “one kilogram of steel is less expensive than a cabbage†occurs. The crux of the problem lies in the blind expansion of steel production capacity, and the homogenization competition is becoming increasingly fierce. Even for high-end steel, there is also homogenization competition. One ton, one ton loss, the final result is that steel prices are not as expensive as cabbage, and selling steel is not as good as selling red wine. It seems that to eliminate this abnormal chaos, the steel industry needs to follow the country's steel industry policy guidance and strictly control production capacity. Then, the steel industry will not appear to suffer losses in the whole industry, and steel prices will return to a reasonable price.
The deep-seated problems behind "steel is not as expensive as cabbage" are worthy of attention and reflection by the steel industry.
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