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China’s economic slowdown control the global steel industry trends (2)

2012 how to get the
steel industry? National have mention of the “mergers and
acquisitions”, compression capacity. From the China Iron and Steel
Industry Association statistics show that the statistics included in the first
half of 2011, steel pipe production enterprises
realized profits of 56.374 billion yuan, an increase over the previous year
less than 60 billion yuan. First half of 2011 had sales of 3.14%, in the bottom
of the rankings of 39 industrial sectors. In the second half is even more
pessimistic, more and more manufacturers at a loss.

How to change this
situation? Expert advice we should raise the level of industrial technology to
improve the resource utilization of iron ore, steel products processing to
increase the depth of scientific and technological content, such as iron and
steel industry. But in my view, the most critical measure is mergers and
acquisitions, compression capacity. Currently, the domestic steel tube market is large, but steel enterprises
are too scattered. Crude steel production enterprises¡¯ average size are less
than 100 tons, and the top five steel enterprises accounted for only 28.5% of
the country’s steel production. China’s
steel industry distribution is a direct factor of steel industry loss expansion.
Future, of course, to study the scientific and technological innovation,
increase productivity measures, but the most simple and effective path is
through the elimination of backward production capacity and disorder capacity
to achieve production. 2012, with the iron and steel enterprise merger and reorganization
efforts to strengthen the overall downward trend in steel production should be
apparent.

    In
year of dragon, what would happen to the steel industry?

China’s steel market wants to
pick up in 2012, unless the Chinese economy and the world economy ‘old risk’ have
been overcome. Otherwise, the Chinese steel market is still difficult to
vibration.

    Look
at China,
the Chinese economy is facing downward pressure. From an investment point of
view, the fixed asset investment growth this year will fall, manufacturing
accounted for 35%, infrastructure accounted for 25%, real estate accounted for
22%. As the manufacturing investment and exports, infrastructure investment,
corporate profits are highly relevant, which will slow down to 20%. Affected by
the transfer-controlled, real estate investment will slow down to 15%. Affected
by the impacts of land acquisition and new projects increase, the housing will
be reduced this year, and real estate investment will fall, with supply slowing
down. This year’s total fixed asset investment growths were on behalf of about
20%. In the future GDP may grow to 8.5 percent.

    Look
at the international, world economic growth continued to slow. According to
World Bank by the simulation shows that as anxiety increases, the growth rate
of developing countries may be from about 6% in 2011 down to 5.5 percent in
2012; while the growth rate of developed countries in 2011 and 2012 years may
fall below 2%. The financial problems have spread from developed countries to
developing countries, resulting in slower growth and poverty reduction results
weakened. At the same time, the current economic problems in Europe
has evolved into a political issue, the future development of this situation is
very complex.

Facing
a headache of steel market last year, no matter how we go blame the adverse
macroeconomic environment, in fact, can not but recognize the importance of the
steel industry’s own factors. We should be clear, when the market viability of
economies unable to stop the recession, the government hoping to lend a helping
hand is a natural logic. However, in 2012 and 2008, as the background of government
was completely different, the biggest difference is that the different
financial constraints. Under the financial constraints, the government must
face the expense of rigidity and income elasticity. Weakening of economic
resilience, it must reduce revenue by 2012.

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