Last year, the steel industry profit of 85 billion yuan in 2011 or continued low profits

The steel industry is still not out of the business "plight." The "Economic Information Daily" reporter learned from an industry internal conference held recently that it was exclusively informed that due to the sharp rise in raw material prices, the annual profit of the steel industry is expected to be around 85 billion yuan in 2010, after deducting investment income by nearly 8 billion yuan, the profit of the main industry is only 770 yuan. 100 million yuan.

In fact, the profits of the steel industry have been divided by the three major mines. "Economic Information Daily" reporter learned from authorities that the iron and steel industry in the first 11 months of 2010 to digest the price of imported ore to pay 26.1 billion US dollars, equivalent to about 175 billion yuan, equivalent to double the profits of the main industry of the steel industry many.

"If you deduct the profits of the iron and steel conglomerate's mines, many iron and steel enterprises are in a loss state." Relevant person in charge of the China Iron and Steel Association said that it is worth noting that the sales margin of iron and steel enterprises is at the lowest level in the national industrial sector. Statistics from the Ministry of Industry and Information Technology show that the consumption of crude steel in the Chinese steel industry has reached 630 million tons, crude steel production has reached 685 million tons, and the capacity utilization rate has reached 89%. However, higher capacity utilization rates are difficult to translate into higher profit margins. At present, the average profit rate in the industrial sector in the country is 6%, and the steel industry is only 3.5%.

“The average price of imported ore in the first 11 months of 2010 was US$126.4/tonne, but the average price of imported ore in November has already risen to US$145.3/ton.” The authorities stated frankly that if the full-year prices for 2011 were based on this price It is estimated that the steel industry will at least absorb more than $11.3 billion in cost increases, which is almost equivalent to eating the entire industry in 2010.

A quarterly pricing agreement was reached between BHP Billiton and Japanese steel mills on March 23, 2010. The 40-year-long long association model was abolished and it has been nearly 10 months. According to foreign media reports, Brazil's Vale decided that the export price of iron ore to China in the first quarter of 2011 will be based on the Platts Index average daily prices from September 1 to November 30, 2010. It is estimated that this price will increase by 8.8% to US$149.20 per ton.

The news that the reporter obtained from the port was that the price of iron ore had risen continuously for several weeks, and the current quotation of 63.5 Indian ore in the outer disk reached a high of US$177/ton. “We are very confident about the price of iron ore in 2011.” A trader at Tianjin Port told reporters.

“The steel industry will face enormous risks and pressures in 2011.” The relevant person in charge of the China Iron and Steel Association said at the meeting that from the macroeconomic point of view, the total volume of foreign trade in 2010 increased by 37.5%, and was reduced to 10% in 2011; the fixed social investment in 2010 The growth rate was 23.5%, and it was reduced to 18% in 2011. These macro indicators will restrain the demand for steel products, especially the export of steel by 27 million tons in 2010. This target will be difficult to achieve in 2011, and the pressure on domestic demand will be enormous. In addition, due to domestic policies, the use of auto plates will also be curbed. On the other hand, pressures for rising costs should not be overlooked, especially the rise in the prices of iron ore and coking coal and sea freight.

It is worth noting that the oversupply pressure in the steel industry still exists. An authoritative source from the China Iron and Steel Association (CISA) told reporters that from the release of production capacity in 2010, steel investment from January to November was 303.1 billion yuan, an increase of 5.3%. The first 11 months of smelting rolled steel investment more than 300 billion yuan, the annual new production capacity of 50 million to 60 million tons. Although the current national efforts to eliminate obsolete production capacity are very large, some large and medium-sized steel mills will continue to inflate their strips.

“Overall, the steel industry will enter an era of high costs, high prices, and low profits in 2011,” said the authoritative source. According to his forecast, domestic steel production capacity will increase by 5% to 6% in 2011, and the demand for ore will also increase.

On the other hand, some analysts believe that the high international iron ore price will accelerate the supply of iron ore. In 2011, the supply of iron ore may change the current situation of a slight tension, and may even achieve a balance between supply and demand.

According to statistics, Brazil’s Vale’s, Rio Tinto, and BHP Billiton’s production growth totaled nearly 90 million tons in 2011. Other medium-sized mines such as CITIC Pacific’s 27 million tons project may be put into production in 2011. In addition, Vale plans to invest nearly 20 billion U.S. dollars in expanding production within the next three years, and both Rio Tinto and BHP plan to invest more than US$8 billion.