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Domestic steel demand in the short term will not big improvement

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International iron and steel association, according to data from November 1, 2014, the global crude steel production is 1.498 billion tons, an increase of 1.8%. In the same period, the national bureau of statistics data show that China's crude steel output of 749 million tons, an increase of 1.9%, account for half of the world's crude steel production. Our country has become a truly global steel production country. Under the background of domestic steel consumption is relatively weak, steel exports sustained high growth.


In 2013, according to China's steel exports more than 60 million tons, an increase of 11.84%. 1 - in November 2014, exports soared to 83.6123 million tons, the rapid growth of 46.78%, a new peak of history. In 2014, ten million tons of steel exports or broken "9".


China's steel exports hit a record high, effectively alleviate the pressure of the domestic steel demand has fallen. Steel exports looks like a piece of red, but from the point of "price", export innovation is high, does not bring the whole industry development peer profits, ultra-low prices, has sold "bargain", and the development of high pollution and high energy consumption way bring serious harm to environment protection, resource sustainability. China's steel import and export of key features:


A, import and export should, slowing imports, exports and net exports hit a record high


China's steel import growth is slowing, imports far worse than exports. Steel imports in China from 29.3033 million tons in 2004, continued to decline in 2013 to 14.0787 million tons, 1 November 2014, China's steel imports is 13.2199 million tons, only a slight increase of 2.70%. Contrary to imports, China's steel exports maintained rapid growth, from 14.2273 million tons in 2004, growing to 2013 tonnes in 62.3296 million, ten years increase 4.38 times. 1 - in November 2014, China's steel exports have more than 83.6123 million tons, annual or 90 million tons. Net exports increased significantly, by 2013 China's net exports are less than 50 million tons of steel. 1 - November this year, China's net exports of 70.3924 million tons of steel, a new historical record.


Second, the general trade accounts for more than 9 into, each kind of trade way maintained rapid growth.


November 1, 2014, China's steel exports of 79.8978 million tons, in general trade way accounted for 95.56% of China's steel exports, an increase of 48.01%. To export processing trade way is 1.9339 million tons, only accounted for only 2.31%. In small-scale border trade and the areas under special customs supervision way are more than 600000 tons of export, the total accounted for only 1%, increased by 16.02% and 16.02% respectively.


Three, South Korea, Vietnam and the Philippines in export before 3 armour, main export markets are maintained rapid growth.


1 - in November 2014, I steel 23.2908 million tons, exports to the association of south-east Asian nations (asean) increased by 44.01%, accounted for 27.86% of China's steel exports during this period. 11.8567 million tons, exports to South Korea grew 34.88%, accounted for 14.18%. Exports to Vietnam and the Philippines are 5.7886 million tons and 4.3809 million tons, up 59.94% and 95.52%, accounted for 6.92% and 5.24%, respectively. Exports to the United States, 3.16 million tons, an increase of 61.68%, accounting for more than 3.78%.


Four, steel plate for the greatest export varieties, steel bar.


November 1, 2014, China's exports of iron and steel plate 39.2383 million tons, an increase of 55.54%, accounted for 46.93% of China's steel exports during this period. Export 27.0943 million tons of steel bars, an increase of 73.64%, 32.40%. Angle steel and steel exports of 4.2652 million tons, an increase of 9.82%, the percentage is only 5.10%. Steel wire and steel pipe fittings exports are less than 2 million tons, accounted for less than 3%.


The main reason for China's steel exports continue to run high:


A, the obvious contradiction between supply and demand, the price is as low as "bargain" export competitiveness.


The macro economic growth is slowing, to this year's steel apparent consumption decreased, for the first time since 2000, steel consumption has dropped for the first time in 14 years. In August of this year, China's crude steel apparent consumption fell 1.9% from a year earlier to 61.9 million tons, August 1 - apparent consumption reduced by 0.3% to 500 million tons. National crude steel production in 2014 or 826 million tons, history will reach a new peak, market oversupply abnormal prominent contradictions. According to cisa data statistics, eight key mills steel inventories in late 14.242 million tons, up 14.37% from a year earlier.


In order to alleviate the contradiction between supply and demand, increasing exports of iron and steel corporation, are taking a campaign at a low price strategy, overseas market. , according to data from the customs information network (www.haiguan.info) - in November 2014 in January 2013, China's steel exports average price besides 1 months remain modest growth, other 22 month presents the negative growth. September, October and November 2014, China's steel export prices decline more than 10% on average, to November export average price has dropped to $684.20 a tonne. Which part of the segment goods prices below even $600 and $500 per ton. On November 27, 2014, the main steel market prices, according to the manufacture of our country's export volume price of us $540 per ton FOB; Hot rolled plate and thick plate in the FOB price is only $465 and $460 per ton. Reduced computation, the steel price is 2 RMB per kilogram, and cabbage prices rather on the market, steel sold "bargain". Excess production capacity, demand is not prosperous, China's steel prices have dropped to the lowest level in nearly 10 years. Plate, hot-rolled coil at the same time, in the commonwealth of independent states (cis) export price respectively for $510 a tonne FOB (black) and $475 a tonne (FOB black sea).


Second, the global manufacturing continues to expand, and emerging market demand expansion drive to export.


Since this year, the increasingly clear signs of recovery in the global economy stabilises, manufacturing a sustained momentum. Jpmorgan chase and Markit jointly issued, according to data from the global purchasing managers' index (PMI) in August expansion speed up again, rose to 52.6 from 52.5 in July, and expansion level for 21 months in a row. Among them, the U.S. manufacturing institute for supply management (ISM) PMI final value is 57.9, according to the data published in the most substantial increase since April 2010. The strong expansion of the U.S. economy is the main cause of global index rose. October and November global manufacturing expansion is slowing, is still in a state of expansion. In October, the global manufacturing pmi stabilisation in 52.2. Global manufacturing sector continued to expand, steel demand increase, according to the world steel association (WSA), expects 2014 global steel consumption will be about 1.562 billion tons, an increase of 2%.


As emerging market countries sustained and rapid economic development, infrastructure construction and civil construction investment increasing, the demand for steel in particular building steel increased significantly. 1 - in November 2014, China's exports to asean in 2329, ten thousand tons, up 44.01%; For African exports of 6.0235 million tons, an increase of 40.09%. Demand from emerging markets to expand pull China's steel exports to increase.


Current our country iron and steel industry overcapacity and exports surged, with many development problem. Industry led to severe overcapacity steel market continues to supply, low price competition increasingly prominent, which makes the whole steel industry fall into the predicament of the "production is not income". At the same time, the increase of export of steel products in China, the cause more trade litigation. Specific as follows:


A, continuing excess capacity, backward production capacity and environmental pressure.


In recent years, China's steel industry investment continued high fever is not retreated, backward production capacity out ineffective, and leading industry overcapacity problem increasingly prominent. The national bureau of statistics data show that in 2006-2012, our country new crude steel production capacity has reached 440 million tons, compared with the total reduce crude steel production capacity is 76 million tons only. In 2013, the new capacity of 80 million tons, is expected to 2014 new production to 30 million tons.


Along with the increase in fog weather across the country, from the state council to the local governments have issued control air pollution and overcapacity. In September 2013 the state council issued the action plan for the control of air pollution, eliminated again in 2015 ironmaking 15 million tons, 15 million tons of steel; In October by the state council "about resolving contradictions of severe overcapacity guidance", puts forward total compression steel production capacity of 80 million tons in the next five years; On January 7, 2014, ministry of environmental protection with the national 31 provinces (autonomous regions and municipalities) signed the goal responsibility of the prevention and control of atmospheric pollution ", has been clear about the local air quality improvement targets and key tasks. On November 25, 2014, the ministry announced in accordance with the conditions of steel industry norms, "the third batch of enterprises, thus 85% of steel production capacity has been documented statistics, eliminate backward production capacity, the possibility of more in the future.


Second, the "price for quantity", vicious competition risk, steel circulation market funds "reservoir" function is lost.


Domestic steel demand remains weak, need to rely on exports to resolve capacity pressures, exports competitive. Iron and steel production enterprises to preempt the limited export market, are taking "to the price change amount" strategy. The move will intensify steel exports vicious competition, and cause more trade friction.


As the steel prices falling, steel traders have "escape", steel market funds "reservoir" function loss. Steel trade circulation to avoid market risks, reduce steel inventories in succession, even adopt the strategy of zero inventory, reduce the order to steel production enterprises, results in the decrease of steel social inventory, production enterprise inventory. In November 2014, steel social inventory a new low since 2009, as of 28, 29 key cities in China social inventory of 8.988 million tons of steel, fell 7.6%, fell 27.8% year on year. Steel inventory structure changes of non-performing loans in the steel trade industry, since this year most of the decline of the quality of bank assets.


Third, the trade friction multiplier, double the event three times for the same period last year, spread to emerging markets.


Since this year, with China's steel exports increase rapidly, the trade friction surge in foreign markets. According to the statistics show that by the end of November 2014, a total of 11 countries (regions) of China's iron and steel products to launch trade remedy investigation 60, an increase of 200%. , including double negative survey 13, the anti-dumping investigation, 41 6 countervailing investigation. Consecutive 19 years in our country to become the country with the largest trade friction, the steel industry has always been in "areas".


From traditional markets such as Europe and the United States steel trade friction presents the trend of spreading to the emerging markets. Since this year, steel products in China has suffered from the United States, India, the eu trade remedy investigation, Malaysia and other countries. Among them, India, Malaysia, Korea, Brazil and other emerging markets have initiated trade investigations. Such as October 30, 2014, Brazil's seamless steel tube anti-dumping final, five-year anti-dumping tariffs, until October 30, 2019. At the same time, this year in Thailand, Malaysia, Morocco, etc have the safeguards investigation measures on imported steel. On August 18, 2014, Malaysia for safeguards investigation of hot rolled steel plate.


Continuously push new country steady growth method, but the domestic iron and steel demand in the short term will not big improvement. Capital security, ten, cut interest rates and encourage social investment measures are developed. Infrastructure, nearly two months, the national development and reform commission has approved the railway project, airport and port projects. In a series of measures to boost the steady growth of vibration, and reform the bonus release, but funding in place and to iron and steel industry demand will take time. So, still have large steel outlet pressure. Advice, strictly implement the industrial policy, and actively eliminate backward production capacity, manufacturing-according-to-sale steel enterprises, standardize the order of export enterprises, beware of low malignant competition.