In the first half of this year, the steel industry continued to maintain a high level of production. There was no obvious relief from the oversupply of the market, and the price of steel products fluctuate. Due to the high cost, the economic efficiency of enterprises showed a monthly decline, and the profitability of the steel industry was at the lowest level in the industry.

I. Operation of the industry 1. Steel production is at a high level. From January to June, the cumulative production of pig iron, crude steel and steel containing duplicate materials was 357.54 million tons, 389.87 million tons, and 516.96 million tons, respectively, an increase of 5.7%, 7.4%, and 10.2% respectively. In the first half of the year, the average daily output of crude steel was 2.15 million tons, equivalent to an annual output of 786 million tons of crude steel.

Second steel exports continue to increase. From January to June, China's total steel exports amounted to 30.69 million tons, an increase of 12.8% year-on-year; cumulative steel imports were 6.83 million tons, a year-on-year decrease of 1.8%, and imported steel billets were 300,000 tons, an increase of 53.5% year-on-year. The total export of steel billets was 25,080,000 tons of crude steel, an increase of 21.3% year-on-year.

Third, investment in fixed assets maintained growth. From January to June, the total investment in fixed assets of the national steel industry was 303.5 billion yuan. Among them, the investment in ferrous metal mining industry was 67.9 billion yuan, a year-on-year increase of 7.8%, which was 15 percentage points lower than the same period of the previous year; the investment in ferrous metal smelting and rolling was 235.6 billion yuan, an increase of 3.3% year-on-year and 6.1 percentage points lower than the same period of last year. .

Fourth steel stocks have decreased. After the steel stocks reached a high level at the end of March, they fell for three consecutive months. At the end of June, steel industry stocks in the major markets of the country totaled 16.91 million tons. Although the stock of steel products in the second quarter decreased, the inventory at the end of June still increased 4.69 million tons from the beginning of the year, an increase of 39.46%.

Five steel prices continue to decline. From February, steel prices have been declining. As of the end of June, the comprehensive steel price index fell continuously for 18 weeks to 98.52 points, a decrease of 6.4% from the beginning of the year and a decrease of 14.7% from the same period of last year, which was the lowest level since November 2009.

Sixth, the economic benefits declined month by month. In the first half of the year, the profits of large and medium-sized steel companies decreased month by month. From January to June, large and medium-sized steel companies realized a total sales income of 1,783.0 billion yuan, an increase of 0.94%; a profit of 1,739 million yuan, a year-on-year increase of 30.40%, and a sales margin of 0.10%; 35 of the 86 key large and medium-sized steel companies suffered losses. With a loss of 40.7%.

Second, the late trend predicts a high crude steel output. In June, the country’s daily output of 2.15 million tons of crude steel had dropped 2 months in a row, but it was still at a high level. As the profit of large and medium-sized steel companies fell in the first half of the year, the entire industry may experience a loss in June. It is expected that the production of crude steel will decline in the second half of the year and the annual crude steel production will be approximately 780 million tons.

Second, the pressure on the market remains large. In the first quarter of this year, the demand for steel started slowly and demand increased in the second quarter. At present, macroeconomic policies continue to maintain continuity and stability, and there will be no obvious pull on steel demand. Therefore, the increase in domestic demand in the second half of the year will not be too large, and the lack of support for steel prices will increase.

Three steel exports have become more difficult. After the United States launched an anti-dumping investigation on China's prestressed steel wire in May, it imposed anti-dumping duties on steel bars in June. At the same time, Canada, Australia and other countries also carried out anti-dumping and anti-subsidy investigations on galvanized products in our country. In particular, ASEAN countries have comprehensively suppressed China's steel products. Under this background, the export growth rate in the second half of the year will fall back. It is estimated that the annual steel export will be 61.5 million tons, an increase of about 10%.

Four low profit conditions will continue. At the end of June, the domestic comprehensive steel price index fell by 6.4% from the end of last year, while the import iron ore price index rose by 8.3% compared with the end of last year. Although the price cuts of raw materials such as coking coal and coke are relatively large, they still cannot fully offset the cost pressure brought by iron ore. In the second half of the year, the task of reducing costs and increasing efficiency of steel enterprises is arduous and is expected to be in a meager state for the whole year.

Fifth, business risks have further increased. At the end of May, the bank borrowings of large and medium-sized steel companies reached 1281.3 billion yuan, a year-on-year growth of 7.54%; the total liabilities have exceeded 3 trillion yuan, and the asset-liability ratio was 69.39%, an increase of 1.41 percentage points year-on-year. With the increase of loss-making enterprises and the increase of liabilities, financial institutions have strengthened their supervision of the steel industry, and the company’s difficulty and cost have increased further, which will increase the company’s financial risk and business risk accordingly.

Affected by the slowdown of the macroeconomic situation and overcapacity of steel production, the production and operation of China's steel industry in the second half of the year is still not optimistic. It is worth noting that hazy weather has caused widespread concern and environmental governance will form a forceful mechanism for the steel industry. Under the current market situation and policy environment, the iron and steel industry must make efforts to adjust and optimize the industrial structure, improve the quality of economic operations, and achieve a coordinated development of scale, variety, efficiency, energy conservation, and environmental protection.