Unilateral decline in the market for years and still did not improve the situation, the domestic crude steel production unabated. When you look back at the financial crisis of 2008, the average daily production of crude steel quickly decreased, the annual steel output in 2008 than in 2007, only a slight increase. Than in the current economic downturn in the first half of crude steel reached 357 million tons, an increase of 1.8%, close to 200 tons per day, to June, the average daily production exceeded 200 million tons, with significantly reduced demand while words, 1.8% of this number is not small.
 
So, what is the reason that production high, or production of brake cars? Probably no more than three conditions: First, the huge capacity enables production base. Production losses, does not produce greater losses will occur. Ever since most steel enterprises ideas are probably underselling maintain the run. As for the loss does not produce ", it is just a theory. "You are not limited to, my limit" --- Who would do such a being taken advantage of? Who Who road? Better to boil it until common "fight to the last".
 
, In the face of a downturn in the market, most enterprises regarded skills, dug within latent "important place, hope to make up for the lower prices, increase profitability through cost reduction and efficiency. This is of course good, but also enhance the competitiveness of the long-term solution, however, the current principal contradiction is an "oversupply" principal contradiction is not resolved, is that there is no "cure" naturally difficult to reverse the situation fundamentally.
 
I believe that steel enterprises must face the market realities, "labor pains" and "suicide" relationship, especially in large enterprise groups, want to supply excess to the crisis turned into the internal adjust the structure of opportunities to turn into the restructuring and development. the opportunity to come up with the "courage" decisive compressed low-end production capacity dedicated to varieties upgrade end of scale, build, actually do turn adversity into opportunity "be able to stand the test of the market varieties competitiveness from excessive The Red Sea "competition, steering the implementation of the" Blue Ocean Strategy ".
 
At the same time, the steel enterprises want to control the capacity as a measure to reduce procurement costs. Data show that domestic and imported ore reached 370 million tons in the first half, an increase of 9.7%, the demand makes the price of imported iron ore overall upward trend. On one hand, the high domestic steel production remains unabated demand for raw materials, the price of raw materials is supported to some extent, this is one of the reasons why steel prices decline in raw material prices fell below; On the other hand, the output is not effective return, the so-called "raw material prices, steel prices, corporate profits squeezed by two, its initiator is due to steel prices should not be too much. Price war, some domestic enterprises from domestic hit the international market: the price quoted by the Chinese people, often the target value is lower than the cost of the foreigners, this phenomenon is beginning when foreigners do not understand, after knowing it, of course, make full use of excessive competition between Chinese enterprises to benefit from it. Steel enterprises to reduce the demand for raw materials by limited production, procurement costs is bound to be further reduced, and in this process, gradual and effective distribution of profits in the balance in the industry chain, so, I believe that late will have a reasonable situation of market operators.



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