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Iron and steel industry in June or reproduction industry-wid

One ton of steel is less than one kilogram of pork money profit

"June, the steel industry may recur industry-wide losses." Hebei a large steel enterprise management yesterday told the "First Financial Daily."

China United Steel Net analyst also told Hu Yanping, said: "June even if there are no industry-wide losses, or at least approaching loss."

Profit before May drop more than 94%

China Iron and Steel Association (hereinafter referred to as "CISA") recently released data show that 1 in May and medium-sized iron and steel enterprises realized profits of only 2.533 billion yuan, representing a decrease of 94.26%; among enterprises suffered losses totaling 11.749 billion yuan, of loss reached 32.5%.

According to CISA statistics, in the first two months of this year, the national key steel enterprises in total loss of 2.8 billion yuan. Subsequent 3,4,5 month begins deficits. Which in May was only realized profits of 1.403 billion yuan, a decline of 21.66% qoq. But in May month enterprises suffered losses totaling 2.139 billion yuan, up by 8.8 per cent deficit, the loss reached 31.25%.

Affected by the big situation, Anshan Iron and Steel Group, following the first four months of losses also by reducing cost, realized losses tough month in May, but in June the situation became critical again up.

China United Steel Net analyst Huzheng Wu believes that although conditions in April and May slightly changed, but into June since steel prices hit a new low and continue to weaken, some steel mills have been re-entering the earnings loss situation.

"June the situation worse than in May, the state may also maintain profit, but now so much a profession, it is ten hundred million profit, which is no big loss with the difference between the edges are at a loss, may at any time reproduction industry-wide losses. "CISA one expert told reporters.

Drop in price rise of embarrassment

In fact, in January and February are not new century steel industry for the first time industry-wide losses, this scene early in the fourth quarter of 2008 had already occurred.

October 2008, the domestic and medium-sized steel enterprises losses amounted to 5.835 billion yuan, to December loss widened to 29.122 billion yuan, industry loss situation lasted until April 2009, seven months consecutive loss.

Lange Steel Information Research Center, Xu Liying expressed, shorter round loss in 2008, and on the amount of the loss to more than a single month, but far less than the 2008 level period.

This is a substantial decline in profits steel prices began last November, and medium-sized steel enterprises total profit fell from 7.899 billion yuan to 1.375 billion yuan, ranging from 82.6%. But the real loss is in January and February of this year, the profit amounted to losses of 2.321 billion yuan and 548 million yuan loss.

Xu Liying believes that the current iron and steel enterprises are still not reached a crisis in 2008 when a continuous sharp losses, which may also stop large-scale steel enterprises is not selected, cut the main reason.

Although the amount of the loss is not a single month in 2008 large, but China Steel Association said experts believe that this year's iron and steel enterprises business situation than in 2008, while the fourth quarter when the volume and price dropped more serious - although the price drop this year, but production did not drop .

"Wen boiled frog more uncomfortable." Xu Liying said the emergence of the current round of market decline, the domestic iron and steel enterprises in the fourth quarter of last year, there have been large-scale production, capacity utilization down to around 80%, but after entering in 2012 rebounded significantly, average daily production of domestic crude steel remained at 2,000,000 tons near capacity utilization continues for more than 85%, to maintain absolute high, while spot market crash in 2008, the steel industry capacity utilization has dropped to less than 70%.

Anshan Iron and Steel Group General Manager Zhang recently in an interview said that with serious excess capacity, product homogeneity prominent in the coming years the steel industry will maintain profit operation. "One ton of steel is less than one kilogram of pork profit era has arrived."