The steel industry is an important basic industry in the national economy, the focus of the field of structural adjustment. In recent years, in order to solve the problem of redundant construction in the steel industry and overcapacity, the state repeatedly regulation of iron and steel industry. 2005 ~ 2010, China's steel production capacity from 424 million tons to 826 million tons, an increase of almost double the industry capacity utilization never 84.0% down to 75.9 percent, down 8.1 percentage points.
 
In 2011, China plans to put into the blast furnace a total of 45 design a total capacity of 64.59 million tons, is put into China's iron and steel industry overcapacity problems and contradictions will become more prominent. The author believes that the steel industry overcapacity, the main reason is not truly identify redundant construction and overcapacity of forming the underlying causes, and control policies and measures is naturally difficult to achieve targeted, the regulatory effect of natural Buzhang a result, steel total production capacity more more limited. "
 
Specifically, the redundant construction of China's steel industry following reasons:
 
First, the ownership reform lags behind the high proportion of state-owned iron and steel enterprises. Reform, iron and steel industry is the most lagging of ownership adjustment in China's manufacturing industry, the state-owned enterprises are still the main body of the most important investment of China's steel industry. By 2010, the state-owned and state-controlled iron and steel enterprises still occupy 56.9% of the total assets of above-scale iron and steel enterprises. This is the highest proportion in China's manufacturing. Serious asymmetry in the benefits and risks, responsibilities and powers between the interests of the leaders of the state-owned enterprises when making investment decisions lack sufficient power and constraints, the investment decision-making has a lot of randomness and blindness. At the same time, due to have the "benchmark" of a large number of inefficient state-owned steel enterprises, even if the steel industry has already appeared redundant construction and production can be excess of, with the efficiency, management, cost and other multiple advantages of private enterprise still will think into the steel industry can be survival and development, investment in steel projects will still be regarded as corporate investment choice.
 
As a result, redundant construction and overcapacity of steel industry trend is bound to make matters worse.
 
Second, impulsive and short-term behavior of local government performance. Since 1994, China began to implement a production-type VAT tax sharing system, local government revenue from value-added tax, business tax, income tax. In this fiscal, taxation, the performance evaluation system, the pursuit of maximizing their own interests, local governments are invariably sights contribution to local GDP and the financial and tax scale and its growth rate, iron and steel industry.
 
In order to develop the local steel industry, some local governments hesitate to use administrative means, in its control of land and financial resources under the price down to far below its normal opportunity cost, and some did not meet the national environmental access threshold steel companies and steel investment project is also open one eye closed. In this case, the private cost of iron and steel enterprises will inevitably much lower than its social costs, investment in iron and steel industry is bound to deviate from the socially optimal amount of investment. In the current fiscal and taxation system, the local government to ensure that the tax, corporate income tax is not lost, bound to the region outside the iron and steel enterprise merger and reorganization in the region of the iron and steel enterprises to set up numerous barriers to the industrial structure of the steel industry optimization process, thereby impeding the elimination of backward production capacity and upgrade process, exacerbated by the repeated construction of the steel industry and the extent of overcapacity.
 
Third, the existing iron and steel industry development policy and regulatory policy has significant limitations. Look from the current steel industry policy, the national macro-economic management department of the steel industry at the policy level, at least the following problems:
 
First, the scale of preferences. Iron and steel industry is a significant industry of the economies of scale characteristics, but such economies of scale are limited, large and extra large steel enterprises do not possess a clear efficiency advantage compared to small and medium-sized steel enterprises. Related to iron and steel industry policy into a misunderstanding of the scale of worship, large-scale iron and steel enterprises can get preferential credit, loose land, cheap and secure supply of electricity and own the right to import iron ore, and small iron and steel enterprises, especially private enterprises, not only in the supply of inputs subject to discriminatory treatment, endure inputs, high costs and insecurity, but also at any time may have been mandatory shut down of government administration.
 
Second, the misconduct of the control measures. In order to solve the redundant construction of the steel industry and production overcapacity in China in recent years introduced a series of harsh macro-control measures, one important one: around the new steel production must be eliminated the same amount of backward production. This policy measures from the vision of the planners, it seems perfect: not only the elimination of backward production capacity, as well as advanced production free market space, and conditions there is no duplication and waste of resources, iron and steel industry upgrading of the structure.
 
However, the policy of this technologically advanced iron and steel enterprises with backward steel bundled, tied the pace of advanced iron and steel enterprises to expand production capacity, results not only in the backward steel production capacity should withdraw from the market out of the market, but to make a number of technical and management behind the iron and steel enterprises to see the market space and have to continue to intensify the expansion of production capacity.
 
Fourth, raising the level of technology and equipment, reducing the investment threshold of the steel industry. Since the 1990s, the level of domestic technology and equipment in China's steel industry have been significantly improved. Under normal circumstances, the domestic metallurgical technology and equipment than similar foreign equipment in the price 1/3 to 1/2. Rolling equipment, for example, before rolling mill of the steel industry in China are imported from Japan, Italy, Germany and other countries, a set of equipment of tens of millions of dollars, and maintenance, high maintenance costs, long maintenance cycle, SMEs are generally difficult to to bear.
 
Rolling equipment in China in recent years to achieve a localization, the investment in equipment and maintenance costs lower than 50%, equipment installation and production cycle was reduced by 1/3. Raising the level of domestic metallurgical equipment manufacturing, greatly reduces the capital threshold for the industry and overseas capital into the steel industry, but also reduces the difficulty of expansion of the size of the iron and steel enterprises in the industry.



Other News:
NTN Corporation has successfully developed the mixed material of the amorphous
China's steel capacity of how the more limited the more ＂?
The IKO non-oil bearing corrosion and corrosion prevention method introduced
Double low billet supply and demand market there are downside risks
SKF Group and Volvo signed a supply of high-performance V40 bearing unit contrac
EU summit agreement to boost oil price of gold
The official response to the high price of cigarettes: comes with neither a secr
Steel prices difficult to substantially increase the trend showed a low volatili