Zhang Longjiang: caused by the steel industry losses for several reasons. The first is the weak global economic growth, the sharp drop in demand for domestic production. The decline in investment growth in the steel industry is very large. Second is the cost factor. The one hand, manufacturing costs, and iron ore prices remained high. Eight years from 2003 to 2011, China's steel industry, iron ore prices spent hundreds of billions of dollars. The other hand, the financial cost. In the past six months, the steel industry of your financing and financing difficulties. China Steel Association member companies financial expenses in the first half rose 37 percent. There are total problem. Late last year, China's steel production has exceeded 900 million tons in recent years, annual growth remained at a level of 16%, far exceeding demand growth.
 
Analysts: China's economy has entered a stage of adjustment. The development of medium-speed or low, will lead to reduced demand. Sharp drop in the downstream steel industry needs to have a direct impact on the steel industry. To solve industry problems, the collapse of steel production can drop the price of iron ore, cost reduction, but this does not resolve the nature of the problem.
 
Moderator: Many steel mills have begun to maintenance shutdown, the impact on the industry? If cut, the impact on steel prices?
 
Fan Xigui: cut-off or cut the market mechanism. The steel mills do not want the first cut, but the market is highly competitive, but also can not escape. When the stock reaches a certain level, the huge financial costs, cut on the imperative. Enterprises cut to a certain extent, be able to stabilize market prices, but the effect depends on the ability to adapt to changes in market demand. Steel should slow down the speed of production, steel prices to stabilize crucial.
 
Zhang Longjiang: part of the equipment in some steel mills, it has been discontinued, and some even stop more than a year, also in recent months discontinued, the core reason is because of market factors. However, steel prices decided to stop the need courage, if the cut-off time is too long or cut-off ratio is too large, there will be loss of the market share of steel. Therefore, some companies in order to keep market share, select the cut-off part of the production capacity, without large-scale or discontinued all. Discontinued situation is not particularly common, there is no less serious in the second half of 2008. However, if the economic situation continues downstream, steel mills will face greater pressure. Cut-off impact on the industry to a certain size will be apparent.



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