High-yield and low profits will continue throughout the steel industry during the ¡°12th five-year plan¡±

A few days ago, during the ¡°12th
five-year plan¡± guiding the development of China’s steel industry documents
12th five-year plan” development plan of steel
industry ” officially released. “Plan” mainly clarify that the
steel industry development strategy and objectives, a clear development
priorities, the optimal allocation of resources to guide the market for iron
and steel industrial restructuring and upgrading of the deployment.
“Plan” had defined the iron and steel industry “12th five-year
plan ” period of development goals: at the end of the “12th five-year
plan “, the steel industry made significant progress in restructuring,
basically create a more rational distribution of productive forces, the quality
of basic iron and steel meet the volume and variety of the national economy
development needs, the initial realization of the steel industry from large to
strong changes.

The ¡°12th five-year plan documents¡±
related to the contents of a broader range, pointed out the major problems
currently facing, including: 1, variety, quality urgent need to upgrade; 2, the
slow progress of layout adjustment; 3, energy, environment, materials bound to
enhance; 4, independent innovation is not strong. Consumption of crude steel in
2015 was predicted, use industry consumer research methods, regional
consumption balance method, consumption coefficient and regression analysis to
have a three integrated forecasting, 2015, domestic guide consumption of crude steel pipe will be about 7.5 million tons.

It is worth noting that this data
object is oriented consumption, is not the apparent consumption and the actual
output. According to the industry generally expected, this year’s crude steel
production would soon reach 700 million tons, compared to total 627 million
tons by 2010 speed significantly, the overall excess capacity of the sword is
still hanging Dharma Aires head. Integrated use of the law of value and
administrative means to resolve the problem even when the session is still the
government had to face the next challenge.

Meanwhile, in order to achieve the
change from large to strong, the ¡°12th five-year plan¡± made a series of
specific objectives, including: 1, originally mainly relied on imports of
silicon steel, axle steel and other high-end varieties with more than 400 MPa high strength twisted steel bar had self-sufficiency
rate more than 80%; 2, weed out of below 400 cubic meters blast furnace
(excluding cast iron), 30 tons and below converter and electric furnace, and
made a series of emissions and energy efficiency targets; 3, industrial
and overcapacity blind expansion of the region to be inhibited ,
built in Zhanjiang, Fangcheng harbor steel base, fundamentally solute the
“North-South transport of steel” problem; 4, the basic establishment
of shared interests in iron ore, coal, iron and steel industry of the original
fuel security system, the new iron ore production capacity of 100 million
overseas tons; 5, focusing on corporate R & D investment accounted for the
main steel business revenues more than 1.5%, widely used and efficient
production and energy conservation and other key technologies; 6, a substantial
increase in industrial concentration, the top 10 domestic steel enterprises of
Steel Enterprise Group take the proportion of the national total output from
48.6% to 60%.

    Overall, the above six initiatives were mentioned the
current domestic steel tube situation urgent
need to address the problem, but to the actual operation is quite difficult to
achieve target, high-end product transition, re-planning of industrial layout,
strengthen R & D etc require significant capital investment, profit margins
have been lower than the banks of the deposit interest rates over the same
period, in terms of the burden of China’s steel industry is not really light. In
the background of downstream wild squeezing the upstream raw material profit
margins, during the “12th five-year plan” period, the domestic steel
industry¡¯s low profit, high production and low growth rate will continue
throughout the keynote.

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