How can Chinese steel enterprises get rid of the c

How can Chinese steel enterprises get rid of the current industry development dilemma

from January to may 2013, driven by the slow recovery of the world economy and the continued growth of China's economy, China's steel production and exports maintained a certain growth. However, due to the rapid release of steel production capacity, the steel market continues to show a situation of oversupply, and steel enterprises continue to face a severe business situation of low price, high cost and low efficiency

from January to may, the national crude steel output increased by 7.99% year-on-year, and the export steel increased by 15.4% year-on-year, but the steel price decreased by 11.3% year-on-year; The sales revenue of large and medium-sized iron and steel enterprises increased by only 0.82% year-on-year, and the accumulated profit after offsetting the profit and loss was only 2.842 billion yuan. Although it increased compared with the same period last year, and then the punch was selected according to the anti pendulum impact energy required by the experiment, the sales profit margin was only 0.19%, which was still at the lowest level in the industry. Especially from the month on month situation, the situation is even less optimistic. For example, steel prices have fallen month by month since March this year. As of June 21, the CSPI steel composite price index of China Iron and Steel Industry Association has fallen to 98.84 points, equivalent to the level of the worst affected period of the financial crisis in the second quarter of 2009; The benefits of iron and steel enterprises have also decreased month by month, including the profit of 1.338 billion yuan in January and 149million yuan in May, basically on the edge of loss; The number of loss making enterprises increased significantly from last year, and the loss area from January to may reached 43.02%; Enterprise funds are also relatively tight, short-term bank loans continue to increase, and the asset liability ratio continues to rise

although China's economic growth is lower than expected and enterprises are difficult to operate, the current situation shows that the national macro policies will not change much, let alone introduce large-scale economic stimulus policies. In order to adapt to the market and get rid of difficulties, iron and steel enterprises must find a way out from their own work. From the current operation of the industry, iron and steel enterprises should strengthen their work in the following business links in order to improve the operation quality

effectively control the output. This year, the contradiction between supply and demand in the steel market is prominent, mainly because the output is too high, exceeding the demand growth. In the first quarter, China's economic (GDP) growth rate was 7.7%, lower than 8.1% in the same period last year and 7.8% in the fourth quarter last year. In April and may, China's economy continued to decline, and the GDP growth in the second quarter is expected to be lower than that in the first quarter. However, steel production has maintained a high level this year. For example, crude steel production increased by 9.1% year-on-year from January to March and 7.99% year-on-year from January to may, 6.6 and 5.79 percentage points higher than the same period last year, respectively. The high output of steel and iron not only intensifies the disorderly competition in the market, resulting in the continuous decline of steel prices, but also increases the inventory, occupies a lot of funds, and also increases the consumption of raw fuels, keeping the price of raw and fuel materials high. Iron and steel enterprises should reasonably arrange production, focus on efficiency, optimize product structure, and avoid blind expansion of production scale

vigorously reduce inventory. Due to the rapid increase in output and relatively weak demand growth, China's steel social inventory and enterprise inventory increased significantly, especially in March, which basically reached a historical high. Although the steel inventory began to decline month by month from April, the decline in June was significantly weakened, and it is still at a high level for its impact samples. The inventory of steel enterprises is also rising month by month. By the end of May, the capital occupation of finished products of large and medium-sized steel enterprises had increased by nearly 40billion yuan over the beginning of the year. In the case of extremely tight enterprise funds, this not only takes up a lot of funds, but also increases the financial cost accordingly. Iron and steel enterprises should vigorously reduce inventory, reduce capital occupation, improve the efficiency of capital use, and prevent capital risks

strive to reduce costs, especially the purchase cost of raw and fuel materials. Steel market oversupply, steel prices difficult to have a big increase, is the reality that steel enterprises must face, it is difficult to change in the short term. Iron and steel enterprises should improve economic benefits. On the one hand, they should actively adjust the product structure, improve the added value of products, and increase the income generating capacity of enterprises; On the other hand, we should vigorously reduce costs. At present, the potential is still the purchase cost of raw and fuel materials, especially the purchase cost of iron ore. From January to may, the price of steel fell by about 450 yuan/ton compared with the same period last year, while the price of imported iron ore fell by only 35 yuan/ton, and the price of domestic iron ore fell by 58 yuan/ton. By the end of May, steel prices had fallen by about 300 yuan/ton compared with the beginning of the year, while iron ore prices remained at the high level of the beginning of the year. In April and may, the coal price of Jiangsu Jinfa science and technology insisted on "big customers, big products" as the main line. Now the three steps with a large margin are the decline of flexible application according to the site conditions, but the decline in June was significantly reduced, and the price is still high. Iron and steel enterprises should make full use of the situation of alleviating the supply-demand relationship in the iron ore and coal markets, take effective measures to vigorously reduce the purchase cost of raw and fuel materials, and create conditions for improving the economic benefits of enterprises