Some of the problems facing the steel industry at present

2022-10-20

At present, the steel industry is facing some inevitable problems, such as overcapacity, industrial concentration and so on. So here is a detailed explanation of the steel industry is facing some problems.

Problems facing the industry:

(1) Production capacity is still excessive, and the benefits of enterprises are polarized. By the end of 2014, China's crude steel production capacity had reached 1.16 billion tons, still at a high level. In terms of enterprise efficiency, the top 20 key large and medium-sized enterprises achieved a total profit of 28 billion yuan, accounting for 92% of the total profit of the industry; There were 19 loss-making enterprises, with a cumulative loss of 11.6 billion yuan, and the profit level of the enterprises was seriously polarized.

(2) The financial situation of enterprises has not been effectively improved, and the problem of bank loan withdrawal and expensive financing is prominent. In 2014, the asset-liability ratio of key large and medium-sized iron and steel enterprises was 68.3 percent, down 0.8 percentage points year on year, but 11 percentage points higher than 2007, when the industry had the best performance. Influenced by the banking system's strict control on industries with excess capacity and the credit scale of steel trading enterprises, the bank has increased the loan interest rate of the steel industry. In 2014, the financial expenses of key large and medium-sized steel enterprises totaled 93.83 billion yuan, an increase of 20.6% year on year, which is more than 3 times of the enterprise's profit. Some banks have taken a large amount of loans to enterprises, pressure on loans, steel enterprises have therefore stopped production or even bankruptcy.

(3) Industrial concentration is reduced, and homogeneous competition is further spread to high-end products. Iron and steel industry efficiency is not good, enterprise merger and reorganization willingness to decline. In 2014, the output of the top 10 crude steel producers accounted for 36.6 percent of the country's total output, down 2.8 percentage points year on year. The high-quality plate projects of large iron and steel enterprises are mostly high-end products such as automobile plate and electrical steel, which have shown signs of excess. The market pressure of low-grade oriented electrical steel, non-oriented electrical steel and ordinary quality automobile plate is further increased, and the homogenization competition of high-end products is increasingly intensified.

(4) The export of products increased substantially, causing trade frictions and conflicts to intensify. In 2014, China's exported steel accounted for 32.2% of global steel trade volume, a record high level. In the first 11 months, a total of 39.76 million tons of boron steel were exported, accounting for about 47.5% of the current period. Many countries have adopted trade protective measures against Chinese steel products. In 2014, the number of trade remedy measures launched by foreign countries against Chinese steel enterprises reached 40. Besides the original developed countries in Europe and the United States, the countries initiated the investigation also added developing countries in Asia, Africa and Latin America, and the scope was gradually expanded.



(5) Floor steel, no ticket sales phenomenon disturb the steel market, market fair competition needs to be solved. Affected by the recession of the industry, some small and medium-sized enterprises have adopted illegal means such as production of floor steel and sales without tickets to gain market share and profits, which has seriously disrupted the fair competition environment in the market, squeezed the market space of formally operated enterprises, and provided living space for backward production capacity, which is not conducive to the healthy development of the industry.

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