The merger and reorganization of the iron and steel industry and adjustment of industrial structure are entering the “pull net†stage.
According to the “Detailed Rules for the Revitalization of the Iron and Steel Industry†promulgated in March, 2009-2011 is the golden period of recovery and adjustment of the Chinese steel industry.
Lange Steel analysts believe that the country hopes that the steel industry in 2009 will be able to curb the decline in crude steel production on the one hand, and on the other hand it does not want to see excessively rapid recovery of crude steel production when global demand is sluggish. This undoubtedly leaves room for the steel industry to adjust its industrial structure, increase its technological content, and establish a market-oriented guiding mechanism.
Analysts in the industry expect that the steel industry will continue to make substantial moves in the near future in preventing excessive production growth, adjusting the variety structure, accelerating the elimination of backward production capacity, strictly controlling new production capacity, regulating steel products, and importing iron ore trade orders.
Lang Ming, an analyst at Lange Steel, believes that from the perspective of industrial statistics, the steel industry is moving toward a correct track, and the continuous depressing of upstream cost prices has gradually slowed downstream industry pressure. The decline in PPI had a significant positive effect on the steel industry. In the first quarter, the ex-factory price of industrial products fell by 4.6% year-on-year, and the decline was smaller month by month. Among them, the month-on-month ratio fell by 1.4% in January, down by 0.7% in February and 0.3% in March. From the ring data, the decline in PPI has been narrowed for three consecutive months, the cost pressure on enterprises has been reduced, the profit space has been released accordingly, and the demand for deep structural adjustments in the future is getting stronger.
The provincial steel plans show that within the next two to three years, the degree of concentration of the steel industry in each province will be greatly improved. At the same time, the utilization rate of production capacity, the improvement of product performance, the optimization of product structure, and the strategic significance of the industrial chain will also be further improved.
According to the plan of the Shanxi Provincial Government, by 2011, the number of iron and steel enterprises in the province will be reduced from the current 200 to 50, and the production capacity of TISCO Group will reach 20 million tons.
Hebei Province plans to complete the basic tasks of scale reduction and product optimization adjustment in 2011. In 2011, more than 5 million large-scale iron and steel enterprises have reached more than 5 million tons.
Shandong Province plans to use Rizhao's iron and steel boutique base as the core of the structural adjustment of the steel industry in the province. Through the elimination of backwardness, mergers and relocation measures to accelerate the transfer of inland steel production capacity to coastal areas.
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