Two factors that stimulate the steel stocks higher
Has been unable to get rid of the steel plate production overcapacity curse instead of market attention, yesterday rushed to the plate or table the forefront of CITIC steel index rose 0.56%, outperforming the benchmark Shanghai Composite Index by 1.13 percentage points. In the the pessimism rich Ruoshi, the early performance of poor fundamentals there is no improvement in the steel shares why adverse economic gains across the board, the underlying logic worthy of scrutiny. On the current situation, China Steel Association called for the relevant departments of the state to restore the tax rebate policy of "import substitution", and called for the breaking of the proposal of the net companies to buy back stock, or steel plate strong push hands.
The tax rebate policy of "import substitution" as early as 1998, the purpose is to encourage export processing enterprises to use domestic products, conversion of part of external demand to domestic demand, improve steel sales. With the enhancement of the iron and steel enterprises' international competitiveness, "the effect of the production jacking policy gradually fade out, easy to be revoked in 2005. Overcapacity in the current era, restart the "import substitution", in essence, little to improve the supply and demand structure influence. Enterprises benefit from the tax rebate policy is a manufacturer of high-end products such as silicon steel and ship steel, and this part of the production is very low proportion in the total production capacity of China's steel production of two types of products, the number of firms are minority. The same time, according to the study of the Changjiang Securities said the country is currently silicon steel exports have enjoyed a 13% export tax rebate, if the implementation in full retreat (or no credit) 17% VAT, preferential tax rate of only 4%, the effect is limited .
Proposal called for the breaking of the net listed companies to buy back shares, analysts believe that, far as the steel stocks, broken net steel stocks listed companies will lower the probability of the share repurchase action. Iron and steel stocks in non-ST-break net 15, for a total circulation of the market value of 221.622 billion yuan. The steel industry is in deep losses quagmire. According to data of the China Steel Association, member of iron and steel enterprises in China Steel Association in the first half realized a total profit of 2.385 billion yuan, plummeted 95.81 percent year on year; enterprises suffered losses amount up to 14.248 billion yuan, the loss of 33.75%. Visible at a loss, struggling steel companies own money to repurchase shares, the difficulty seems larger.
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