Top Grades
SAE
API
Home > Sellinglist - Chinese Steel Industry Will Usher in the "Big Steel Enterprise Era"

Chinese Steel Industry Will Usher in the "Big Steel Enterprise Era" steel plate

 On September 21, the “2020 Steel Market Outlook and Risk Control Seminar”(hereinafter referred to as the seminar) was held in Nanjing. The seminar was co-sponsored by the Grand Chamber of Commerce, Nanjing Iron and Steel (hereinafter referred to as Nangang) and the School of Advanced Finance of Shanghai Jiaotong University (hereinafter referred to as Shanghai Gaojin). Jiang Hao, member of the member service department of the Grand Chamber of Commerce, Yao Yongkuan, executive vice president of Nanjing Iron and Steel, Shanghai Zhou Jinjun, the person in charge of Gaojin, and nearly 50 people from representatives of the steel industry and related financial service institutions attended the seminar.
Analysis of the steel industry policy in 2019, Cai Yongzheng, director of the Nanjing Iron and Steel Securities Department, believes that the implementation of industry policies in the first half of the year is less than expected. He said that the steel industry's target requirement is that the supply-side structural reform needs to be further deepened; the new capacity and the “strip steel” will be resolutely prevented; the iron and steel enterprises should restrain the impulse to expand production and actively maintain the balance between supply and demand in the market. However, the reality is that the reform focus has shifted to mergers and acquisitions and de-leveraging; the non-member steel companies have experienced rapid growth in capacity; the local market has led a new round of expansion, and the market supply and demand balance is difficult to maintain.
Cai Yongzheng believes that the merger and reorganization of China's steel industry is unstoppable. Through mergers and acquisitions, China's steel industry will usher in the "big steel enterprise era." Cai Yongzheng said that according to the goals set by the Ministry of Industry and Information Technology, from 2018 to 2020, the merger and reorganization policy will be improved; from 2020 to 2025, the steel industry will be merged and reorganized on a large scale. The ultimate goal is that by 2025, 60%-70% of China's steel industry's output will be concentrated in about 10 large groups; Baowu will merge with Maanshan Iron & Steel Co., Ltd. After the merger, China Baowu's crude steel output will rise to the global level. One. In 2018, China's Baowu's crude steel output reached 67.429 million tons, and Maanshan Iron and Steel Group's total output was 19.642 million tons. The combined capacity of the two was nearly 100 million tons. Cai Yongzheng said that the number of enterprises in the scale of 5 million to 15 million tons will be significantly reduced. Instead, 3-4 million steel groups including 80 million tons will be replaced, and 6-8 steel groups of 40 million tons will be produced. Grade steel companies will be inevitable.
For the 2020 black industry chain how to do a good job of risk management, Cai Yongzheng said that the first is the risk of real estate investment falling due to the adjustment of real estate market policy. Steel mills and steel traders have high stocks, and they can carry out futures selling hedging on steel with appropriate basis; for rebar and hot-rolled futures contracts, they should sell hedging according to the basis of the basis.
Second, facing the risk of rising coke prices brought about by the supply-side reform of the coking industry, the industry chain can be based on the basis of the situation, the main contract of coke for futures, options to buy and maintain; steel mills can be purchased on demand, choose the focus of the main contract to buy Insured value.
Third, facing the oversupply of the industry, the profit of steel mills is squeezed. Industrial chain enterprises can reduce spot inventory, pre-sale of their own steel output, reduce the purchase of spot raw fuel, carry out future virtual inventory purchase of raw fuel, and select far-month futures contract for virtual steel plant lock operation.
(source from csteelnews.com)
Share
Are you also interested in further steel processing (machining)?

Just like you, 70% customers choose long-term cooperation with BBN steel not only for our good product and service quality, good reputation in the international market, but also for our experienced one-stop raw material supply and further steel processing!

Fabrication and Machining Service24h Technical support

Spot Resource