Rabbit Year began, the steel industry brewing a new change.

"Now the steel enterprises are diverted to the line, closing the door, are self-employed," Beijing Giant Henderson International Trade Development Co., Ltd. sales manager Mr. Zhang so exclaimed.

In the past 2010, Tianjin private steel hero; Rong Cheng Steel head Zhang Xiangqing announced abandoned steel practitioners, Hunan Shun Xin steel officially shut down, Hebei Iron and Steel, Wuhan Iron and Steel Company and other large steel are seeking to " Non-steel "industry transfer, Tang Gang in 2010 is a quick step into the real estate industry, even the domestic steel leader Baosteel are brewing industry restructuring.

All this, according to the industry's complaints: are iron ore to be forced.

Cost pressures are forced to switch

On February 15, 2011, BHP Billiton, one of the three mines, recently issued the latest offer for iron ore from the $ 155 / tonne in January to $ 168 / tonne. (This is the FOB price, if the Australian to China in accordance with the average sea freight 7 US dollars / ton, ore CIF will reach 175 US dollars / ton.)

Increasing iron ore prices for domestic steel prices can not afford, "the profitability of the steel industry is now the lowest in the domestic industry," said Wu Zixiang, an iron and steel analyst. According to the data released by China Steel Association, from January to September 2010 large and medium-sized iron and steel enterprises sales profit margin of only 2.84% in the third quarter was only 1.6% in the fourth quarter was only 2.8%, much lower than China's industrial sector 5 % Of the average level.

"We want to change the price of non-refundable payment, we can only endure," Zhang Xiangqing in the wing, we have to change the price, we can only endure, Cheng steel choose to switch to openly exposed the hearts of their own depression, he felt the Chinese steel industry like the meat on the chopping board as foreign three miners slaughter, leaving only the profitability of the living space. However, relative to the high prices, the most steel headache is due to iron ore prices canceled the long association mechanism, the cost can not control. "Now the cost of production of steel risk is too big, cancel the long association, the three mines in the implementation of quarterly pricing of iron ore, in 2010 and a new iron ore index pricing, resulting in iron ore prices fluctuated, steel enterprises Production of this single money may be a single money, can not control the cost of this production is the most worried about, "Wu Zixiang said. BHP Billiton announced the day of price increases, there are steel market benchmarks said Baosteel also raised the price of steel in March 2011, the vast majority of varieties raised 200 to 300 yuan / ton, in addition to sand steel, steel and other steel prices have also Announced the revised steel price.

High inventory, high prices and low demand, which is the status of domestic production of steel, according to Lange Steel Network February 11 monitoring data show that 29 key cities inventory hot coil inventory of 5.5886 million tons, year on year growth of only 6.44% , Short-term stock of steel stocks is too high.

"The state regulation of real estate, steel demand is not up, the bank to raise interest rates, monetary tightening, but the steel prices are rising step by step, the market will take some time to digest steel prices, the past two years, steel prices are difficult to have signs of improvement" The Wu Zixiang said.

Because the main profit margins of iron and steel industry, many steel companies to seek "non-steel" transformation. Wuhan Iron and Steel in charge of the person in charge, to the "second five" at the end, Wuhan Iron and Steel non-steel industry share will increase from the current 8% to 30%, public information, Wuhan Iron and Steel in 2010 total sales of 185 billion yuan, profits of 3.0 billion, Less than 2%. Of which non-steel profits reached 1.8 billion, accounting for more than half of total profits.

Inhibit the production capacity to get together silicon steel

High cost, serious overcapacity of China's steel industry in the past two years had a major surgery.

Domestic steel prices large and small countless, crude steel production is amazing, 2009 global steel company crude steel production in the top ten, half from China, they are Hebei Iron and Steel, Baosteel, Wuhan Iron and Steel, Jiangsu Shagang, Shandong Steel. After the financial crisis, the domestic steel industry has set off a wave of corporate restructuring climax, reorganization of the drama to Hebei Iron and Steel, Shandong Iron and Steel as the representative of the two giant. After two years of mergers and acquisitions, by 2011, the pattern of reorganization of the steel industry was initially summarized as seven groups: Baosteel, Anshan Iron and Steel, Wuhan Iron and Steel, Hebei, Shandong, Shougang and Shagang.

After the operation, the problem is still there. The industry believes that the domestic steel production of rebar and other low-value-added crude steel, low-level production, and now found no money earned, and U-turn began to produce cold-rolled, silicon steel, coating and other high-tech steel.

"Domestic steel production like to get together, before the crude steel project is swarming, and now on the silicon steel project is also swarming, it may not be long, the domestic production of silicon steel production capacity will appear excess situation," Wu Zixiang said he also told Reporters, in 2008 to start the restructuring of steel enterprises, there have been a lot of down the original production line, the construction of high-end sheet metal projects, steel prices rushed to the plate market, resulting in a substantial decline in sheet profitability, production in 2009 Process complex sheet project, profitability is not as good as construction steel project, which is a true portrayal of the project get together.

According to a data from China's joint steel network, in December 2010, China's domestic silicon steel production was 51.4 million tons, an increase of 9.48%, growth of 1.98%. It is worth noting that this is China's domestic production of silicon steel for three consecutive months exceeded 500,000 tons of production. 2010 annual, domestic silicon steel production of 5.71 million tons, an increase of 24%. The data also show that: Wuhan Iron and Steel shares, Anshan Iron and Steel shares, Maanshan Iron and Steel shares of silicon steel production are significantly increased.

And more steel enterprises to the steel downstream industry transfer. In the second half of 2010, Tanggang quickly established the mechanical equipment company, the new business development company, real estate development Co., Ltd., maintenance engineering company, and HNA Group's Dahua Xinhua Group signed a strategic cooperation framework agreement, Tang Gang hand Dahua logistics bundled steel sales and transportation, to the downstream transport industry penetration.

"Production of steel is not as good as eating bank interest, and now a lot of steel mills are one step into the steel downstream industry, such as logistics, supporting deep processing, construction, steel trade, are to improve corporate profits," Beijing Lange steel market A trader said.

In order to compress the profit margins, steel enterprises have always been unable to focus on channel construction began to skip the middle traders, to direct sales, to establish their own sales channels, Hebei Iron and Steel Group in 2011, Tang Steel Branch of the company now requires direct sales of steel this year Product sales of 40%, and many steel enterprises began to direct sales of numerous steel traders living space is even more precarious.

"In the domestic steel production interest chain, foreign mines are big fish, big fish to eat the rest to the domestic steel enterprises, domestic steel prices from the remaining profits out of a small number of small and medium traders to eat, now Domestic steel prices are also stealing with steel traders, we have almost no live steel traders, "the Lange steel market traders exclaimed.