Iron and steel industry into the "winter" Baotuan "warm" to be policy support - iron ore, steel, Baosteel - machine tool industry

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"The turning point of growth in the steel industry has emerged that rely on strong demand, product prices, we all make money in the development model will be difficult to reproduce. In the face of rising costs, the dual pressure of tight money, the steel industry is moving into high Cost of the times, and the comparative advantage is gradually lost. and enterprises rely on low-cost, competitive price-cutting ways come to an end. "Not long ago, Baosteel Group Chairman Xu Lejiang says.





He noted that cost pressures, economic slowdown and weaker demand for downstream industries macro background, the potential profitability of the steel industry significantly increased the risks and difficulties, the steel industry has already bid farewell to the rapid growth in previous years, the enterprise business The old model is no longer valid. Therefore, the Chinese steel industry must speed up mergers and acquisitions, accelerate industrial upgrading to cope with fluctuations in the global economy and recession.
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Signs of depression across the industry


The face of sluggish steel market and the current turmoil in financial markets at home and abroad, Xu Lejiang frankly, the future development of iron and steel enterprises can not be optimistic.





Period of time from the current depressed market conditions the industry point of view, Xu Lejiang that less than this year's steel output will reach 500 million tons, with Baosteel orders for their own feelings of view is inadequate, it is hard to fall in steel prices will squeeze the upstream raw material prices, and impact of iron ore negotiations. It is reported that domestic steel production in July rose 8.9% in August grew by only 1.5% of steel demand, but in August fell by 6%.





Macroeconomic development in the uncertainties and downside risks to the increase in reality, the high cost of steel production, enterprise resource and environmental pressures become increasingly prominent, foreign investment has also accelerated the penetration of the Chinese steel industry, which have allowed mergers and acquisitions China's steel enterprises inevitable strategic choice. SAC Secretary for Planning and Development





Wang Qi pointed out that by the marked slowdown in world economic growth, the U.S. subprime mortgage crisis and the domestic economic overheating for macro-control measures taken by other factors, the next few years the face of China's iron and steel industry The situation will be very tough, iron and steel industry will slow the pace of development.





He said steel demand growth will be slowed down to show a trend, or even stop the growth of steel prices may continue to fall. Domestic steel production capacity exceeded demand, a number of poorly managed companies will be forced to shut down or restructured. With the integration of upstream and downstream industries to promote, iron and steel enterprises are facing the pressure will increase, margins will shrink.





Wang Qi said the reorganization should speed up the adjustment of iron and steel enterprises meet challenges, resolve conflicts can take the most effective measures, but also for the sustainable development of the internal demand. From another point of view, the next few years is accelerating the restructuring of China's steel industry restructuring, industrial upgrading of the favorable opportunity. Market changes and opportunities brought about restructuring





Zhang Xiaogang, president of China Steel Industry Association said in July this year after a sharp decline in steel prices, according to the current cost and market price analysis, large-scale steel enterprises in China have been at small profits, small and medium sized steel enterprises losses, individual enterprises have been discontinued, the industry will inevitably have to face competition. In this case, only the weak companies and resources security, advanced technology and equipment market of corporate restructuring firm, to escape the fate of being eliminated, which will speed up the process of mergers and acquisitions.





China Iron and Steel Industry Association statistics show that the first eight months, China's steel enterprises in the production costs by 60%. The prices of steel products into the domestic market began to decline after July, the average price per ton of steel down about 800 to 1,200 yuan. On the other hand, the social demand for steel is weakening in August decreased 6% year on year demand.





Executive vice president of China Steel Industry Association, Luo also believes that the steel industry's survival of the fittest real time had arrived. Dominated by large enterprises with mergers and acquisitions,