The crude steel output is growing too fast. The oversupply pressure in the steel indust

     The crude steel output is growing too fast. The oversupply pressure in the steel industry shows that under the background of high steel prices, steel companies have begun to increase their productivity. 
     According to the data released by the National Bureau of Statistics on May 15, China's crude steel output reached 76.7 million tons in April, up 4.8% year-on-year; the average daily output of crude steel was 2.5567 million tons, a record high. 
     Researcher Xu Liying told the First Financial Reporter that since the beginning of this year, due to the clearing of the strip steel, the off-balance sheet data has turned to the table, and steel production has been at a relatively high level. However, considering the factors such as environmental protection and limited production, the market generally predicted that the average daily output of crude steel in April will be around 2.45 million tons (that is, near the peak of 2.44 million tons last year), but from the published data, 4 The monthly crude steel output was 115,700 tons higher than last year's peak, which exceeded market expectations. 
The First Financial Reporter noted that from the ring data, the average daily output of crude steel in April increased by 170,200 tons from the previous month. According to the data released by the China Iron and Steel Association, the average daily output of member companies increased by 131,000 tons in April from the previous month. It can be seen that the growth of crude steel production is mainly concentrated in large and medium-sized steel enterprises. 
Since April, with the gradual release of demand, the steel market has accelerated its turnover and steel prices have rebounded rapidly. On the supply side, as the industry's benefits continue to improve, the continued high steel prices have contributed to supply production to a certain extent. According to the monitoring data, in the first half of May 2018 (May 7), the national steel comprehensive price index rose by 97.4% from the beginning of 2016 (February 1), and the increase was nearly doubled. 
      In Xu Liying's view, the large increase in profits caused by the high steel prices is undoubtedly the main reason for the continued rise in crude steel production this year. In the first quarter, the overall profit of the ferrous metal smelting and rolling processing industry increased by 64.1%. In the same period, the profit of large and medium-sized iron and steel enterprises totaled 56.932 billion yuan, compared with 23.284 billion yuan in the same period of last year. It is obvious that large and medium-sized steel enterprises have stronger profitability.
The first financial reporter found that the delisting effect of steel listed companies in the first quarter of 2018 was obvious, the sales expenses, management expenses and financial expenses all showed a downward trend, the asset-liability ratio decreased, the cash flow improved, the operating income increased, and the profit rate performance Overall is better. 


Under the favorable environment of the industry, the impulse of steel companies to expand production capacity and increase production cannot be avoided. It has been previously reported that with the improvement of the efficiency of steel mills, some zombie companies have sneaked back. Coupled with the transformation of electricity in some steel companies last year, electric furnace capacity was also released during the year. 


China Steel Association warned that the excessive growth of crude steel production has created a large downward pressure on the market and brought hidden dangers to the normal operation of the whole industry. The steel industry may once again appear to be oversupply. 


“Steel prices have risen last year, many steel companies have made money, and they want to continue this year. But they have not seen that China’s economy has shifted from high-speed growth to high-quality development. The GDP growth target of around 6.5% means that the demand for steel is not so big. Liu Zhenjiang, secretary-general of China Steel Association. 


From the perspective of production and management, high profits will inevitably lead to high output. But can steel mills fully release capacity? Xu Xiangchun thinks maybe not. Xu Xiangchun said that China Steel Association only counted the output of key steel enterprises, and the output of non-key steel enterprises was not included in the table. The environmental protection and production restrictions have a greater impact on these enterprises. For example, the limited production in Xuzhou area, the non-heating season blast furnace in Tangshan area is limited to 10-15%, and the majority of steel mills in Wu'an area are limited to 50% of blast furnaces. The environmental protection production limit makes steel production potential limited. It is expected that the steel output increase in May will not be There will be too much.