Steel prices have risen by more than a thousand steel companies generally turn losses into profits

Since the first half of last year, steel prices have begun to recover thanks to a series of measures such as supply-side reforms and elimination of backward production capacity. Taking rebar as an example, the average price on March 9 last year was 2475 yuan/ton, and on March 9 this year, it has risen to 3852 yuan/ton, an increase of 35%.
Benefited from the increase in steel prices, the performance of steel companies last year has improved significantly. In 2015, Nangang, Liugang and *ST Shaogang lost 2.432 billion yuan, 1.189 billion yuan and 2.596 billion yuan respectively. Last year, these three companies lost 2.432 billion yuan, 1.189 billion yuan and 2.596 billion yuan. Steel companies achieved profits of 350 million yuan, 185 million yuan and 101 million yuan respectively.
According to statistics from China Iron and Steel Association, in 2016, the total sales revenue of large and medium-sized iron and steel enterprises reached 2.80 trillion yuan, a year-on-year decrease of 1.81%. However, the total profit turned from a loss of 84.7 billion yuan in 2015 to a profit of 30.378 billion yuan. Turn losses into profits.
Since 2016, the steel industry has also begun the process of reducing production capacity. However, according to the National Bureau of Statistics, China’s crude steel, pig iron, and steel output in 2016 were 808 million tons, 701 million tons, and 1.139 million tons, respectively, an increase of 1.24% year-on-year. 0.74%, 2.30%; China's crude steel production accounted for 49.6% of global output, an increase of 0.2% year-on-year; domestic crude steel consumption was 709 million tons, an increase of 2.08% year-on-year. It can be seen that capacity reduction has not directly affected the output of the steel industry, so the surge in prices should be closely related to fluctuations in demand.
On March 5, this year’s government work report clearly stated that “this year we will reduce steel production capacity by about 50 million tons and withdraw coal production capacity by more than 150 million tons. At the same time, we will eliminate, suspend, and delay the construction of coal power capacity of more than 50 million kilowatts. , To prevent and resolve the risk of overcapacity in coal power, improve the efficiency of the coal power industry, and make room for clean energy development."
Although this year’s target is a reduction of 65 million tons of steel production capacity and 290 million tons of coal production capacity actually completed last year, considering that most of the iron and steel capacity reductions removed last year were ineffective production capacity, and the output is still at a record high, the supply-side capacity reduction this year is expected Going further in the substantive direction, especially the ground steel production capacity will be completely eliminated in the first half of the year, which will have a substantial impact on market supply.
　　 As the market enters the "golden three silver four" consumption season, there is an expectation of further improvement in demand. At the supply level, the Development and Reform Commission clearly banned the production capacity of industrial frequency furnaces and intermediate frequency furnaces for the production of construction steel in the first half of the year. During the two sessions, the production of steel plants in North China was limited to 50%, as well as the irregular environmental supervision by the Ministry of Environmental Protection, which will affect the overall supply. In particular, the supply of construction steel will still be significantly suppressed.
　　 Nangang
　　 On March 10, 2017, Nanjing Iron & Steel Co., Ltd. issued an announcement on the pre-increasing results for the first quarter of 2017. In the first quarter of 2017, the company is expected to achieve a net profit of RMB 400-500 million attributable to shareholders of listed companies, and its performance has increased significantly year-on-year.
While enhancing the competitiveness of the steel business at this stage, the company continues to promote transformation and upgrading. It plans to integrate existing diversified industrial resources and foreign investment platforms, focusing on the development of emerging industries such as energy conservation and environmental protection, smart manufacturing, and Internet +, and actively connect with Nanjing Jiangbei New Area. development plan. In 2015, the company invested in the establishment of Jinkai Energy Conservation and Environmental Protection Investment Holding Co., Ltd., and integrated the company's existing energy conservation and environmental protection business into the Jinkai Energy Conservation and Environmental Protection platform, which provided a foundation for the company's energy conservation and environmental protection industry development. In the next step, the company plans to use cooperation introduction + independent integration to focus on solid waste treatment, sewage treatment and waste heat power generation, and realize the implementation of energy saving and environmental protection projects as soon as possible.
　　 Liugang
　　 The company is the only comprehensive steel production enterprise in Guangxi, and it has an absolute dominant position in the Guangxi steel market. At the same time, the company is expanding its market to neighboring provinces such as Guangdong and Hainan, and appointing technical personnel to station in Guangdong. In 2015, the share of the company's building materials products in the Guangxi market increased significantly. In the first half of 2016, the company's steel products have received further discounts on rail freight, and Yunnan, Guizhou, Sichuan, Changsha and Guangzhou will become regional markets with consistent transportation costs. In addition, the company's e-commerce platform has launched spot sales, bid sales, and forward transactions in a timely manner to develop key projects and direct supply to end users.
　　*ST Shaogang
*ST Shaogang released its 2016 annual report. During the reporting period, the company achieved operating income of 13.973 billion yuan, a year-on-year increase of 25.38%; operating costs were 13.326 billion yuan, a year-on-year increase of 6.40%; net profit attributable to shareholders of listed companies was 101 million yuan, compared with the same period last year A loss of 2.596 billion yuan; the realized EPS in 2016 was 0.04 yuan, compared with -1.07 yuan in the same period last year.
The company is the largest steel company in Guangdong Province, and its main products rebar, wire rod and ship plate account for 13%, 16% and 10% of the province’s cities, respectively. The company's successful turnaround in 2016's performance was mainly attributable to the industry's recovery, non-recurring income increase and cost optimization.

Production process of welded steel pipe

China Steel Association: Steel prices in the domestic market continued to rise slightly in September