It is too early for the iron and steel industry to turn losses into losses

Recently, the China Logistics and Purchasing Joint Committee Steel Logistics Professional Committee issued the steel industry PMI index. In April, the index was 48.2%, a rebound of 5.2 percentage points from the previous month, reaching the highest point in eight months. However, the PMI index for the steel industry has been below the 50% line for the 12 consecutive months, reflecting the continued sluggishness of the steel industry.

According to data released by the recent Development and Reform Commission, the iron and steel industry realized a profit of 18.13 billion yuan in the first quarter, a sharp drop of 36% year-on-year. The data released by the China Iron and Steel Association also shows that in the first quarter, large and medium-sized Chinese iron and steel enterprises, loss-making enterprises reached 50, ** Steel Association statistical member companies accounted for 49.5%, loss-making enterprises a loss of 10.355 billion yuan, an increase of 27.31%. The data also shows that major and medium-sized iron and steel enterprises in the country suffered a total loss of 11.053 billion yuan and a loss of 3.433 billion yuan. In addition, in the first quarter, 34 listed steel enterprises realized operating revenue of 2660.05 billion yuan, a year-on-year decrease of 18.37%, a loss of 1.555 billion yuan, and nearly 16% of the loss-making steel enterprises, indicating that the steel industry is still facing a severe situation.

According to industry insiders interviewed by the Economic Herald reporter, the iron and steel industry, which had just lost money last year, experienced a sharp drop in profits in the first quarter of this year, which made people feel that the “spring” of the steel industry is far from coming.

The industry is still sluggish. According to statistics, the new orders index for the steel industry in April was 49.4%, up 3.9 percentage points from the previous month. The index has risen for three consecutive months and reached the highest point since August 2014, indicating that The number of orders received by steel mills continued to increase, and the market purchase demand showed a pick-up trend. However, the index has been below the 50% contraction range for 10 consecutive months, indicating that in the economic downturn, the market demand is still insufficient. Both real estate construction and industrial manufacturing are difficult to release strong purchasing demand.

“April is the traditional peak season for steel consumption, and there is usually a seasonal pick-up in end-use demand. However, in the economic downturn, especially in the real estate downturn, the overall demand for steel in April has been at a relatively stable level, clearly less than market expectations. "The analyst told the reporter.

Rong Cao, general manager of Jinan Rongxin Economic and Trade Co., Ltd. also said that sales did not appear large ups and downs. "Although there has been a slight improvement in the past three months, this improvement has not been as rapid and direct as imagined," Cao Long explained.

According to analysts' analysis, statistics from the National Bureau of Statistics show that in the first quarter, investment in fixed assets in the country increased by 13.5% year-on-year, down 0.4% from January to February, setting the lowest growth rate since 2001. Real estate development investment increased by 8.5% year-on-year, a sharp drop of 5.4 percentage points from January to February, setting the lowest growth rate since the second half of 2009. The area of ​​newly-started houses and land purchased by real estate development companies fell sharply by 18.4% and 32.4% year-on-year, respectively. The decline rate was 0.7% higher than that in January-February, and the funds for real estate development companies fell by 2.9% year-on-year. The growth rate of investment in fixed assets continued to fall. In particular, the data on real estate investment continued to be sluggish, which caused a significant drag on the overall domestic steel market demand.