China Steel Industry Association has released the first half of the industry operation, China's steel industry has been at a loss edge. However, analysts believe that, in the context of "steady growth" in the second half, infrastructure, affordable housing construction will boost demand for steel, iron and steel industry's profitability will be improved, needs to pick up the support.
 
Overcapacity in the lack of demand
 
The data show that in the first half of the China Steel Association Member iron and steel enterprises realized a total profit of only 2.385 billion yuan, significantly reduced year on year to 54.549 billion yuan, a decrease of 95.81%; enterprises suffered losses totaling 14.248 billion yuan, the loss of 33.75%. If the net investment income, the main steel business is actually losing money.
 
Logistics and Purchasing Association of China Steel Logistics Professional Committee has released the latest report shows that the domestic steel industry in July PMI index fell to 44.5 percent last month, down 4.7 percentage points. This reflects highlight the contradiction between supply and demand of the domestic steel market, the overall trend is still weak.
 
Pick up can be period
 
Looking at the second half of the researcher in the industry believe that demand will improve, the industry will show the warming trend of shock.
 
Orders and export orders to downstream demand of steel products in the third quarter should be a degree warmer.
 
The demand side of the steel industry is mainly concentrated in real estate, infrastructure, automotive, shipbuilding, home appliances, machinery and so on. Among them, the real estate accounted for the largest, is the most important downstream industries. The real estate market, the state at the beginning of the year this year continue to strict regulation and control unswervingly Up to now, none of the control efforts and regulatory objectives has changed. Real estate investment growth and the growth rate of acquisition of land area in June continued to steadily decline, dropping by more gentle.
 
However, the data also show that the growth rate of real estate sales due to "just be" pulling a rebound. 20 days before the July 45 key tracking urban real estate total turnover of the area of ??16,396,000 square meters, up 63.5 percent, and average daily turnover of an area of ??820,000 square meters, higher than the 799,000 square meters in June.
Protection of housing construction in the second half is a bright spot. Finance Minister Xie deployment of the second half of fiscal priorities, July 26, to implement and improve the structural tax policies, to accelerate and expand the pilot of the business tax reform levy VAT, to accelerate the construction of affordable housing, all kinds of shantytowns and dilapidated houses in rural transformation. These will be the second half of steel prices play a strong support.
 
For the steel industry, the backbone of the major projects will always be demand, especially in railway construction and other major infrastructure projects.
 
Since the second quarter, China's investment in infrastructure, new projects increased significantly. The data show that the second quarter of new projects with investment of $ 10.18 trillion yuan, an increase of 23.3%, the highest level in quarter. At the same time in June, the Ministry of Railways investment in fixed assets of 48.097 billion yuan, an infrastructure investment of 43.226 billion yuan, two the amount of investment have reached a new high this year. Recently, the Ministry of Railways will be the scale of railway infrastructure investment this year raised 64 billion to 470 billion yuan, and more government also introduced a one hundred billion level of infrastructure investment plan, the second half of the growth rate of China's investment in infrastructure will further accelerate.
 
This year, the Ministry of Railways, the cumulative bond financing will reach 115 billion yuan. Development and Reform Commission also encourages local governments to "inter-city rail + property development" model to attract private capital, including enterprises, involved in or controlling inter-city railway construction. These will no doubt ease the tensions of the railway infrastructure fund, to provide adequate financial support for the railway infrastructure
 
Downstream demand continues to increase support, the steel industry, the industry rebound.



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