In the first quarter of this year, China's steel industry can net profit of 1.034 billion yuan of negative. This is the first time since the new century the steel industry in the industry losses, steel industry will be the national industrial profits dropped most of the industry.
The steel industry is China's industrial fundamental industry, is the pillar industry. The steel industry in production and management, and the industry's profit loss status is the national economy operation and reflect the trend of change one important observation point.

Last year and this year, China's economic growth is slowing, and annual GDP growth expected this year's target of 7.5% for the first time is "broken eight". According to the national bureau of statistics released, 2012 quarter GDP growth in the fourth quarter of 2011 from 8.9% to 8.1%. Although the number was still higher than this year's GDP growth target of 7.5%, but 0.8% decline but still some unexpected. At the same time, 1 ~ 3 state-owned enterprise in total realize the profit of 482.86 billion yuan RMB, a 9.1% year-on-year drop. In this background, the steel industry in the whole industry of losses, seems to have a certain inevitability.

According to the work of our country steel released by the letter 1025 planning predict, 2015 years ago, our country steel consumption amount to 710 million tons to 810 million tons in between, that is, the steel industry in China has now entered the period of excess capacity.

With the emergence of the excess capacity, China's steel industry profit level also fall subsequently. In the first quarter this year, steel net profit of 1.034 billion yuan for a negative, is for the first time in 12 years the industry losses, but also on the national industrial profits dropped most of the industry.

The personage inside course of study thinks, the steel industry serious losses, present never had the three characteristics:
One is the greater the losses of the enterprise more and more serious. Published first quarter results of the steel company listed on the forecast, almost all do kui: shougang shares the kui more than $140 million, HuaLing steel the kui more than $690 million, gets $1.89 billion deficit angang shares.

2 it is for many years development momentum has been very good, never the large private steel losses of the enterprise, its main business began to losses. In 2011, China's steel industry average sales rate is 2.42%, the private enterprise with a flexible operation mechanism and good cost control, at 2.7%. This loss of enterprise, it is a signal of danger.

Three is affected by investment support, and to building steel is the enterprise the plank after losses into enterprise channel. This means that, along with the national 4 trillion yuan plan of the bonus exhausted, steel downstream demand more difficult to find a decent window.

Although the domestic steel price in March by drop turn up, key steel enterprise profit more than 2 billion yuan, diluted the two months before the influence of huge losses, but also in the continuous iron ore prices dropped five months later, again present upward trend. At present has reached 150 us dollars/tons, a bottom picks up nearly $20 / tons.

As profits is thinner, China's steel industry iron ore prices by impact, especially heavy reliance on imports, limited many. In 2010, iron ore import source to 40 (2011 years already expanded to 63 house), imports 618 million tons, accounts for about 67% of the total consumption of iron ore, than has increased nearly 32% in the ten years ago. Therefore, the international iron ore prices once more, the steel industry in our country it's very hard for it.

China's steel industry had experienced the brilliant lucrative s, expanding the scale. But over the past five years, the steel industry gone from bad to worse, the windfall profits before sliding into the comprehensive gradually now losses.

Iron ore prices, once thought to be the main reason for the decline steel industry. But since the second half of last year, the mineral price during peak by more than $190 m/tons of fallen to $150 / ton, fell more than 20%. Over the same period, the iron &steel enterprise KuiSunMian but once more than 40%. Obviously, in addition to the influence of the factors by the price of iron ore, steel industry in China and the losses even more complex and profound reasons, including reckless expansion of production capacity is one of the important factors.

In the past five years, steel production in China to expand rapidly. In 2007, 550 million tons of crude steel production but, now has reached 900 million tons, serious than the consumer demand.
Some experts think the, since 2012, the steel industry will enter the overall surplus stage. That is the main steel varieties already supply, and steel consumption further growth of the space is not large, excess capacity as the steel market operation of the main contradictions will exist for a long time.

Experts think, "to capacity of the" will be the future of the steel industry trend. This includes backward, and speeding up the productivity out of m&a and perfect industry exit mechanism, etc. In the process, to avoid non-market power intervention. In the iron and steel industry "1025" programming, also clearly stated that "merger
 
&reorganization is to push forward the country steel industry structure adjustment of the important means, and the formation of China is the international competitiveness of enterprise group, the only way of steel to combine the backward, technical transformation and layout optimization, advancing the our country steel enterprise merger restructuring".

The steel industry in China has more than 7000 companies, including crude steel production enterprise of many 500, average size only more than 100 tons, the first home crude steel production steel enterprises accounted for only 27.8% of the country's total output, lagging far behind the U.S., Japan, Korea's 70% ~ 90% level. To "1025" at the end, our country will be home before 10 for steel enterprise industrial concentration increased to 60%, and this on the existing basis increases by 12%.

The steel industry another not allow to ignore the problem is, the low end of the crude steel production tremendous, and high-end steel varieties need to rely on imports, and vigorously develop high technical content of iron and steel industry also is around the corner, this is also reduce productivity improve benefits one of the main ways.

Face the grim situation, the core of the steel this year is "the profit".
Tight control of production is the industry's consensus, but difficult to implement. With the recent price increase of steel, crude steel production rebound on the average daily, to early April has been to 2.03 million tons of a record high level, far more than 1.87 million tons last year.

This, on the one hand, should see, this one has the capital environment better, affordable housing to speed up the construction progress, and some local infrastructure construction continue factors such as start;




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