Shenzhen Shengjinlong Iron and Steel Co., Ltd.

company's product

The output of galvanized pipe in Shenzhen Steel Plant has increased significantly, but the profit of steel enterprises in the first half of the year has fallen sharply.

According to the calculation of crude steel diameter, the galvanized pipe of Shenzhen Steel Plant increased the crude steel output by 44.34 million tons in the first half of this year, while the net export of steel equivalent to crude steel decreased by 70,000 tons, which was mainly used for domestic consumption. It can be said that the growth of steel output this year is entirely driven by domestic market demand.

Imported iron ore has risen sharply. The galvanized pipe imported 500 million tons of iron ore in the first half of the year, down 5.9% year-on-year, with an amount of 43.2 billion US dollars, up 15.7% year-on-year. On a monthly basis, the average import price rose from $74.18 per ton in January to $97.51 per ton in June. If it is in RMB, it will increase by 22.6%. According to the calculation of the China Iron and Steel Association, the increase in mining prices has increased the manufacturing cost per ton of steel by about 240 yuan.

At the same time, steel prices have fallen slightly. In the first half of the year, the China Steel Price Index issued by China Steel Association fluctuated around 110 points, with an average price index of 109.48 points, down 3.6% year-on-year.

Despite the substantial increase in the output of galvanized pipes, the profitability of steel companies in the first half of the year fell sharply. In the first half of the year, the steel and steel enterprises of China Steel Association realized sales income of 2.1 trillion yuan, a year-on-year increase of 10.9%; sales cost of 1.9 trillion yuan, an increase of 15.2% year-on-year; cost increase was greater than income growth; total profit reached 106.5 billion yuan, down 20.5 year-on-year %, of which the main business profit decreased by 30.7% year-on-year; the sales profit rate was 5.1%, down 2 percentage points year-on-year, lower than the average profit rate of industrial enterprises above designated size.

"From the operation of the steel industry in the first half of the year, the galvanized pipe industry seems to have returned to the strange circle of 'increasing production and not increasing efficiency.'" Gao Xiangming reminded that if the concept is not changed in time, the idea of relying on scale expansion, high yield and super production will be changed. Unifying the understanding to improve the quality of development, the steel industry is still likely to return to the old road of oversupply.
It is strictly forbidden to increase the production capacity in violation of regulations to prevent the resurgence of “strip steel”

Under the strong promotion of the galvanized pipe, China's galvanized pipe industry completed the target of over 150 million tons of excess capacity in advance two years ahead of schedule, and completely banned the production capacity of “strip steel”, and the industry's operating conditions have been significantly improved.
In recent years, galvanized pipes have been driven by structural adjustments and interests, and the number of replacement projects in the steel industry has been high. According to preliminary statistics, the crude steel production capacity of the proposed steel project in recent years is nearly 200 million tons. "In the case of the national economy's declining intensity of steel demand, it is likely to trigger a new round of overcapacity, and the task of consolidating the results of de-capacity is arduous."