The predicament faced by the Chinese steel industry has caused concern in the industry, and how long it will take for this dilemma is people’s concern.

“Now the profits of the steel industry selling a ton of steel are a six-month-eight!” Wang Xiaoqi, vice president of the China Iron and Steel Industry Association, said that the steel industry in China is in the most difficult period in history. According to the data of the first few weeks of August, the industry’s The loss is still widening, and it is expected that the steel industry will face a more difficult situation in the fourth quarter of this year and the first quarter of next year.

Wang Xiaoqi made the above statement at the “2012 China Coal Char Industrial Supply and Demand Summit Forum” held in Qingdao. He introduced that the steel industry suffered losses in January and February of this year and began to make money from March to May. However, as the price of steel products continued to fall, the industry’s profitability declined, and in July, it suffered losses again. In the first half of the year, the profit per ton of converted steel was up to 6.68 yuan, and in the previous July, the profit per ton of steel fell to 1.68 yuan.

According to a sample survey, the industry suffered a loss of 81% in the second week of August, and the loss increased to 83% in the third week. Losses have increased.

“The direct cause of the large-scale loss of the steel industry is the shrinking demand of the major steel industry.” Wang Xiaoqi said that the largest user of steel is construction, accounting for about 55%, of which half is related to real estate, and real estate development is down, the other is the highway bridge, Water conservancy facilities, airport construction, etc. The second largest demand maker is manufacturing, while the manufacturing growth rate has dropped from the previous double digits to single digits.

Wang Xiaoqi said that according to the random inspection survey of 5 steel samples in 22 cities, the true social inventory in the steel industry is not 10 million tons, but 60 million tons or even 70 million tons or more. Coupled with the stockpiles of steel companies, the entire stock of steel is more than 100 million tons, and there is a great deal of pressure to destock inventory in the later period.

Wang Xiaoqi believes that excessive steel stocks will affect the profits of the steel industry in the later period, and it is estimated that the fourth quarter or next year will be more difficult than it is now in the context of large-scale stimulus policies. However, the underlying causes of difficulties in the steel industry are mainly excess capacity and low concentration.

Wang Xiaoqi believes that the difficult situation in the steel industry will push raw material prices to face deeper adjustments. Since the beginning of this year, steel prices have fallen by more than 1,000 yuan per ton, coke prices have fallen by more than 300 yuan, and iron ore prices have only dropped by about 200 yuan. According to a reasonable ratio calculation, there is room for further price cuts for mines and coal, and the space is relatively large.