China's steel industry capacity utilization into the basic reasonable range

“The utilization rate of China's steel production capacity has increased from 70% in 2015 to the current 80%, and it has entered a basically reasonable range.” Recently, Wang Lianzhong, Deputy Secretary-General of the All-China Metallurgical Chamber of Commerce, said that the current steel industry is facing a new development situation, supply and demand Contradictions have shifted from serious surplus to relatively balanced.

Wang Lianzhong said that changes in steel production have been effectively controlled, and a normalized production and control system has been initially formed. From profitability to reasonable profit changes, the steel industry has realized development from difficulties, and from difficult to affluent enterprises have formed a stage of development from difficulties and transition to high-quality development. A group of private enterprises have accumulated more funds and their strength has increased. In addition, in terms of environmental governance, environmental friendly, energy-saving and emission-reduction become the key to the development of enterprises. Environmental pollution and high energy-consumption production methods have become the red line of business survival.

Indeed, the effect of the ban on steel bars has been further manifested, and the phenomenon of “bad coins driving out good money” has been suppressed. Crude steel production of key enterprises in private enterprises was 299 million tons, an increase of 7.45% year-on-year; steel production was 290 million tons, an increase of 7.96% year-on-year. The output of crude steel of other small enterprises was 171 million tons, an increase of 1.26% year-on-year; the output of steel products was 414 million tons, a decrease of 28.11 million tons, a year-on-year decrease of 6.36%.

Due to the improvement of productivity and the improvement of the market, steel companies in 2017 ushered in a substantial increase in profits. According to data from the All-China Metallurgical Association, the labor productivity, production costs, and profits of private steel companies have increased significantly. Per capita annual steel production is more than 400 tons higher than the industry average, and the highest sand steel has reached 1,400 tons. The labor cost per ton of steel is about 200 yuan lower than the industry average. The profit rate of private enterprises was 6.32%, 3.62% higher than the 2.7% in 2016; the average per-ton steel profit of private enterprises was 430 yuan, an increase of 336 yuan from the 94 yuan in 2016. Among them, Shagang Group achieved a profit of 19.2 billion yuan, becoming the vanguard of the steel industry.
 

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