External Uncertainties Increase Decline of China’s Steel Exports

//External Uncertainties Increase Decline of China’s Steel Exports

External Uncertainties Increase Decline of China’s Steel Exports

From January to August this year, China’s steel industry showed a good operating trend in the context of China’s stable economy, but external uncertainties have brought downward pressure in the industry. Glory steel could offer cold drawn steel square bar. At present, China’s steel market is generally in a weak balance. Cold drawn steel square bar is one of main products in Glory Steel. Driven by domestic demand, China’s steel output maintained a relatively high growth rate in the first eight months, and steel, iron and steel production increased by 9.1%, 6.9% and 11% respectively. During the same period, China’s steel prices fell by 5.3% year-on-year. The supply and demand side of China’s steel market is still in a weak balance. In the case of high production, the market’s expectation of contradiction between supply and demand is strengthened. Judging from the monitoring of member companies of the Iron and Steel Association, the profit of the company in the first seven months showed a downward trend. From the perspective of import and export, China’s steel exports have declined for the fourth consecutive year. In the first eight months of this year, China’s steel exports were 449.74 million tons, down 4.4% year-on-year, and steel imports fell 12.8% year-on-year. The decline in steel exports this year is related to the international economic downturn and the increase in China’s domestic demand. 2019 is the fourth year of China’s supply-side reform. In 2016-2018, the domestic steel market is in a state of relatively tight supply and demand, and the price operation is mainly driven by changes in the supply side of steel. With the deepening of the supply-side reform, the industry chain profits will be redistributed in 2019, steel prices will fluctuate in a narrow range, and corporate profits will return.
From 2019 to 2020, China’s steel industry will usher in the peak period of layout optimization and restructuring. The supply of high-quality capacity will expand. The supply-side reform will force the inefficient production capacity to clear, the debt ratio of steel enterprises will gradually decline, and the Chinese steel industry will move toward high quality green development stage. At present, the development of China’s steel industry mainly faces three difficulties and problems. First, environmental protection requirements are becoming more and more strict, and corporate cost pressure is high. Second, international trade protection is increasing, global economic growth is slowing, and external demand is insufficient. Third, raw material prices are rising, corporate profit margins have shrunk. Looking ahead to the steel market in the future, China’s infrastructure investment will gradually improve in the second half of this year, providing support for steel demand. The supply and demand of steel will shift from tight balance to relatively loose supply, export demand will remain flat, and the whole society will enter the accumulation stage. At the same time, the cost of steel has moved down a step, and in the future or under the current stage of shock operation, the profit of steel production enterprises will return in the second half of the year, regional differences are obvious. As one of the pillar industries of the national economy, iron and steel still has many opportunities. It is hoped that all parties concerned will strengthen exchanges and cooperation and jointly promote the sustainable and healthy development of the industry. In the next step, the steel industry should deepen the supply-side structural reforms, promote industrial restructuring, improve quality and service to meet the higher requirements of the downstream market, adhere to the low-carbon green development concept, achieve integration and coexistence, optimize resource allocation and enhance sustainable operations ability.
By | 2019-10-09T14:37:55+00:00 十月 9th, 2019|News|External Uncertainties Increase Decline of China’s Steel Exports已关闭评论

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