Iron and steel enterprises have serious losses in their main business, which shows what the problem

The ** of commodities is determined by the value of commodities and the relationship between supply and demand, and steel products, as an ordinary commodity, are no exception to follow this law. At present, China's iron and steel after many years of high profitability, induced the disorderly excessive expansion of the industry, state-owned enterprises, private enterprises, foreign-funded enterprises and so on have invested in the construction of steel plants, resulting in the current production capacity of more than one billion tons. With the substantial reduction of the scale of infrastructure represented by real estate and the reduction of infrastructure investment intensity, as well as the shrinking investment desire of state-owned enterprises, the strengthening of the return of funds from private enterprises, and the acceleration of the withdrawal of foreign-funded enterprises, the demand for steel will no longer increase significantly.

This must have caused a serious surplus, in order to maintain the basic contract volume, the steel mills will fight each other, reduce the **, so that the hot-rolled sheet is less than 1750 yuan [tax included], and the rod and wire rod is about 1800 yuan to consolidate, which is the so-called lower than the cabbage. This situation will continue for a considerable period of time, will not change immediately, and does not conform to the objective environment for the transformation and upgrading of the steel industry. As a practitioner in the steel industry, I have experienced the process of glory to decline, which is really emotional.

Industry insiders believe that this situation will continue for a long time if the state does not intervene. Many steel mills are currently holding on, waiting for the right moment. The steel boom is no longer coming, and the scale of one billion has become cabbage; Don't complain that the market has entered the harsh winter, and they will tear each other down without permission; Yesterday, he was still a farmer, and he turned into a steel mill; Show off that you can get rich, and the steel boss will pass it on to future generations; Those who reap the harvest also build factories, and those who graft cotton also come in; married the actor to invest **, and the assets were transferred overseas; Ten generations can't use their private wealth, and they will never repay the loan; How long is the freezing period, I will stop the furnace first to avoid debts; What to do with the workers' lives, they really deserve their own ideas!

In the next two years, China's steel market will not be optimistic, overcapacity of about 400 million tons This is the consensus of the industry, and a large number of private enterprises have not produced steel production lines have not been dismantled, are waiting for the opportunity to open the furnace smelting, due to the low cost of environmental protection, the local ** is not strictly supervised, the employment of people to adopt a casual flexible work system, the tax package system, the simplification of product production processes, the quality requirements to reduce the grade and other cost advantages, these eyeing private enterprises are like flies in the spring, As soon as the season arrives, it pops up to breed, and the slightly improved market is immediately suppressed back. Therefore, the recovery of the iron and steel industry can only be achieved through the treatment of bone scraping and curing poison at the national level.

There is a surplus in the steel industry and a decline in traditional industries.

First, the steel industry is a cyclical industry, and its rise and fall always follows the trend of domestic economic operation. With the increasing downward pressure on China's economy, fixed asset investment (mainly real estate investment) has plummeted, making steel demand continue to decline.

Second, overcapacity is the main reason why the steel industry is difficult to get out of the "frozen period".

There is serious overcapacity in the steel industry, and one of the most important reasons is the serious misalignment of government and enterprise functions.

The reasons why the steel industry is facing losses today are complex, but they can be summed up in two ways:

1.There are too many steel enterprises and low-level repeated construction, resulting in a scramble to reduce prices, and products cannot be sold;

2.It is a great sadness that China has the world's largest steel production and sales volume but cannot take the initiative in iron ore negotiations.

To solve these problems, it is also simple: big fish swallow small fish, and powerful large steel enterprises vigorously promote industrial mergers and acquisitions and eliminate excess capacity. On the one hand, this is conducive to the pricing power of enterprises in the final product, and on the other hand, it is also conducive to the right to speak in the long-term agreement price negotiations with iron ore international iron ore giants.

Reduce production and reduce procurement costs.