Weak demand, high inventories, new capacity release imminent, the steel industry is facing an unprecedented crisis.
 
The latest data show that as of August 11, China's top five varieties (wire, thread, hot rolled coil, cold rolled coils, plate) steel community inventory of 15.15 million tons, compared to the same period last year increased to 1.35 million tons still at historically high levels.
 
View from the new market supply, in July this year, the domestic crude steel production of 61.69 million tons, the chain grew by 2.5%, an increase of 4.2 percent, the daily production of crude steel was 1.99 million tons, 17,000 tons less than in June, the yield reduction not. The inventory situation is grim, the new capacity is no doubt once again aggravated the situation of supply and demand imbalances.
 
With the stock surge in supply and demand imbalances, steel prices continuing to fall, industry profit margins all the way down from 8.11% in 2004 to 2.57 in 2010 and 2011, the industry profit margins again Tandi to 2.42% this year probably will continue to decline.
 
Recently, the China Steel Industry Association president Zhu Jimin said, the cumulative profit of the domestic members of steel prices in the first half of this year fell to 2.39 billion yuan, a year-on-year plunged 96 percent. The economic slowdown clearly has made the steel industry hit hard.
 
Institute of forward-looking industry, steel industry researcher Zheng fresh air that can hardly be in the global macroeconomic environment, the context of optimism and domestic economic slowdown, the domestic steel industry just to the winter solstice, the industry's dilemma, or to long sustained, the winter will be very The cold is very long.
 
The industrial base of the steel industry as the national economy, its development depends largely on the steel consumption of large real estate industry, infrastructure industry, mechanical industry, automobile, iron and steel industry will be developed with the development of these industries, as these industry downturn and recession. However, the situation is getting worse.
 
Prospective Korea Institute for Industrial Data Monitoring Centre data show that in 2011, real estate steel downstream of the steel industry accounted for 36.10 percent, followed by the machinery industry,
accounting for 16.50%, with the exception of transportation, outside the Civil Engineering accounted for 11.10% of the energy, automotive followed by transport, accounting for 7.90% and 6.90% respectively. The first half of 2012, these industries almost across the board to shrink.



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