"Twelfth Five-Year" steel demand has entered the peak area of ​​800 million tons

After several years of rapid development, China's steel industry is entering a peak, and overcapacity problems are gradually emerging. At the 7th Bohai Iron and Steel Market Forum and Lange Steel Network 2011 held recently, relevant persons from the Ministry of Industry and Information Technology pointed out that during the “Twelfth Five-Year Plan” period, China’s steel demand will enter the peak arc area, about 800 million tons. The industry will show a trend of low growth rate and low profitability. Increasing steel standards and accelerating product upgrades will be an important task for the steel industry during the 12th Five-Year Plan period. Demand will enter the peak During the “Eleventh Five-Year Plan” period, China's steel production capacity will grow rapidly. In 2010, the national crude steel output has reached 627 million tons, and in 2011 it is expected to exceed 700 million tons. While the steel production capacity is growing rapidly, the industry still maintains a low level of profitability. According to estimates by the Ministry of Industry and Information Technology, the demand for the steel industry during the “Twelfth Five-Year Plan” period will be between 710 million tons and 800 million tons, and demand will enter the peak arc zone and reach the highest point. Luo Tiejun, deputy director of the Raw Materials Industry Department of the Ministry of Industry and Information Technology, said that the highest demand for the steel industry may occur during the "Twelfth Five-Year Plan" or even the "Thirteenth Five-Year Plan" period, with a peak of about 800 million tons, and this peak may last for ten years. fifteen years. “With the continuous development of production capacity and the squeeze of upstream and downstream prices, the profit of the steel industry has been unsatisfactory. Especially after entering the end of October, the price of steel has fallen sharply, which has affected the profit level of the industry.” According to Luo Tiejun, this year ago The profit margin of the steel industry in the past 10 months was only 2.91%, less than 2% after deducting the profit of Baotou Steel Rare Earth. The steel industry has achieved an overall profit margin of less than 3% for two consecutive years. In October, the domestic steel market saw the biggest decline in the year. According to Lange Steel's data, the Lange Steel National Steel Composite Price Index was 171.7 at the end of October, a sharp drop of 7.1% from the previous month. The average price of long products and plates fell by 340 yuan from the end of last month. Among them, long products fell by 7.3% month-on-month; sheet metal fell by 6.6%. Oversupply of domestic resources, slowing demand, and tight capital have caused manufacturers to lose confidence and steel prices have fallen. Luo Tiejun said that the steel industry is facing severe challenges such as high resource prices, slower demand growth, and increased environmental pressure. Product homogenization competition is intensifying. It is expected that the industry will show low growth rate and low profit during the 12th Five-Year Plan period. Operating situation. The “Twelfth Five-Year Plan” ushered in the transition period “The market environment forced steel to enter a critical stage of transforming development direction.” Luo Tiejun bluntly said that accelerating product upgrades will be the most important task for the steel industry during the “Twelfth Five-Year Plan” period. A few large steel companies can focus on the development of high-performance steel products. For most steel companies, the quality and stability of the “large-volume” products should be improved. Luo Tiejun revealed that during the “Twelfth Five-Year Plan” period, the regulatory authorities will raise various standards for steel and promote product upgrading. "Since July, China's construction projects have prioritized the use of Grade III rebar. The next step will be to reform the rebar production standards. The original plan is to complete the plan within two years. Currently, it is planned to complete the rebar production standards in the first half of next year. It is forbidden to produce Grade II rebar.” Luo Tiejun said that in the future, it will create conditions for the transformation and upgrading of the steel industry through upstream and downstream coordination. Li Yongjun, deputy director of the Comprehensive Department of China Iron and Steel Association, pointed out that when it is technically difficult to achieve breakthroughs in steelmaking and ironmaking, China's steel industry needs to integrate industrial chain upstream and downstream. "The integration of steel industry is based on the vertical extension and diversification of the industry of steel industry. The key point is to break the boundaries of the industry and reduce the overall operating costs of the industrial chain." Li Yongjun bluntly said. At present, the characteristics of “the resource is king” in the global steel industry have begun to appear. ArcelorMittal, the world's largest steel manufacturing group, has proposed that the future self-sufficiency rate of ore will reach 70%. Obviously, China's steel industry also needs to gradually develop upstream and downstream. Li Yongjun said that in the future, China should gradually integrate the iron ore industry into the steel industry and strengthen the capital integration of steel production and circulation and processing enterprises.

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