The operation of the steel industry in 2014 and its future prospects

Abstract At present, as the Chinese economy and the world economy continue to merge, our way of thinking needs to be further improved and changed. Today's steel people must look at themselves from a global perspective, highlight marketization, and seek sustainable development. However, no matter how the future develops, steel...
At present, as the Chinese economy and the world economy continue to merge, our way of thinking must be further enhanced and changed, including today's steel people must look at themselves from a global perspective, highlight marketization, and seek sustainable development. However, no matter how the future develops, the important role of steel in the long history of mankind will not change.

I. Analysis of the operation of China's steel industry

The year 2014 will soon pass, and the global economy, including China's economy, is not as optimistic as expected at the beginning of the year. Numerous research institutions have lowered their growth forecasts for 2014 and 2015. The International Monetary Fund expects global growth of 3.3% in 2014 and 3.8% in 2015. We expect China's economic growth rate to continue to fall next year on the basis of this year's decline, but it is unlikely to fall back below 7%.

The worldsteel has also lowered the demand for global steel for the global economic development. From January to October this year, the actual global steel production growth was only 2%. In 2014, the demand increased by 2%, and in 2015 it was also 2%. This is their global It is expected to maintain growth. When we look at steel, we cannot simply look at ourselves. We must look at the conditions and changes in various industries that serve the national economy. The impact of China's economic slowdown and structural changes on the steel industry is enormous. Many people only care about the slowdown in economic growth, and we must pay more attention to the impact of changes in economic structure on us. why? Because 55% of steel consumption is related to investment, about 30% is related to manufacturing. In the first three quarters, the contribution of the tertiary industry to the economy has surpassed that of the secondary industry. The tertiary industry also consumes steel, which inevitably affects our consumption structure. More importantly, the 55% investment growth rate associated with us has fallen sharply. The growth rate in January-October this year was only 15.9%, which is the lowest in 13 years. Consumption contributed more to our economy than our investment. We must not only care about the impact of the overall economic slowdown, but also the impact of economic structural changes on our steel, which is of great concern to all steel people.

This year, China's steel prices fell sharply, from 292 yuan in January to September, and 335 yuan in January-October. why? Steel is the most surplus industry. Not long ago, the Ministry of Industry and Information Technology issued the third batch of qualified enterprises. The production capacity of only 305 companies in three batches exceeded 1.1 billion tons. It is inevitable that China’s steel surplus will be serious and will inevitably lead to brutal competition.

Steel efficiency is the lowest among all industries, with a profit margin of only 0.75% from January to October. There are many reasons for the improvement in steel efficiency and the same period last year. First, the price of minerals has dropped sharply. Secondly, the reforms and innovations within the steel companies have greatly reduced the cost. Despite this, sales profits in all industries are still the lowest, and more importantly, the steel industry is still in a state of loss or meager profit, which is a very bad phenomenon. Comparing Europe, the United States, South Korea, India, and other countries in Russia, we are also at a relatively low level.

For the Chinese steel industry, the price of ore has fallen far more than the decline in steel prices. When I was meeting in Australia in early September, I temporarily predicted the price of iron ore this year. I said that the price of 80 dollars this year is a step, maybe it will reach 70 dollars. Despite this, is there a possibility that the price of the mine will not fall? From the perspective of cost, I personally think that there is still room for reduction. From the perspective of the balance between supply and demand, further research is needed.

At present, we are facing two pressures: one is environmental protection pressure, and the other is financial pressure. The pressure of environmental protection is that enterprises should contribute to society. The new Environmental Protection Law on January 1 next year is a challenge for all steel companies. All enterprises should meet the standards. If they do not meet the standards, they will face serious punishments. penalty. Financial pressure refers to the fact that the entire national system does not support physical industries, including steel. The high profit margin of the financial industry is caused by the profit or monopoly of the real economy. We must innovate and develop, and pay close attention to the industry changes brought about by the development of ideas and e-commerce innovation, adapt to the changes brought about by new technologies; our business model and management model must follow the changes.

Second, China's steel consumption outlook in 2015

In 2015, the steel research institute predicted that the consumption of steel in the next year will be increased, including China's construction industry, machinery industry, automobile industry, energy industry, shipbuilding industry, home appliance industry, railway industry and container industry, but the growth rate is different. China's actual steel in 2013 was 690 million tons. This year we analyzed about 710 million tons. It is expected to increase by 720 million tons next year. Next year, crude steel will maintain a growth rate of 1.7%. It is expected to import 940 million tons of iron ore this year. . The lower the mine price, the larger the import volume, and we expect to import about 1 billion tons of iron ore next year. Whether it is for steel producers or ore traders, more than 700 million steel markets and 1 billion tons of ore market are huge. We can't be too pessimistic. The green consumption and housing related to us, including huge infrastructure, railways, water conservancy construction, etc., still have a lot of consumption space. I don't think the economy will fall off the cliff. We can't just focus on the growth rate, but also on quality, efficiency, strength, and competitiveness. If the country let the economy decline, the bank interest rate will not be lowered. I believe that the country does not allow the Chinese economy to grow at a rate of only 4%, as some economists expect.

Third, the development direction of the "13th Five-Year Plan" of the iron and steel industry

Looking forward to the future, China's steel consumption will be above 600 million tons before 2025, and crude steel production will be more than 800 million tons but will not exceed 900 million tons or 1 billion tons, because the total consumption is clearly in front of us.

The future direction of development can be summarized into eight words: reform, adjustment, green, and innovation. To maximize user value, there is no room for survival without users. At present, the main problem in the steel industry is that the quality of the products is unstable and cannot be simply understood as poor quality. From the perspective of sales, product quality stability is particularly important. To develop high-end products to meet the new requirements of rapid development, the production capacity structure, layout structure and organizational structure should be continuously optimized. After the price of the mine fell to 70 dollars, the price change is very important for the layout adjustment. It cannot be taken lightly because the mine price is low.

To lead the development of MPI with "five degrees of thinking": height, breadth, depth, speed, satisfaction. What is height? Address the challenges you have never had before with the height you deserve. The so-called breadth is multi-angle thinking, and you can't simply look at yourself from your own business. The so-called depth is to deepen learning, to learn from peers will progress, cross-line learning may make a big leap. The so-called speed is to quickly reflect the market and quickly serve the users. The so-called satisfaction is the goal and the foothold of the first four "degrees".

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