Heat the Iron and Steel Industry Will Continue in 2017?

In 2017, China's steel industry will still in a critical period of transformation and upgrading, the situation is still grim. As the welding steel pipe, seamless steel pipe, galvanized pipe, straight seam submerged arc welding pipe, carbon steel pipe, scaffolding, and other products production services vendors, Shinestar group thinks, although in 2016 iron and steel enterprise profitability, a successful counter attack, but it is not optimistic.

Industry fundamentals, the situation of oversupply of steel market is not a fundamental change, iron and steel enterprise's profit foundation is still not strong enough. On the one hand, the high volatility in the prices of raw materials, such as coke, ore, iron and steel enterprise profit control to bring greater pressure. Since this year social inventory exploded on the other hand, the first week of Spring Festival domestic steel inventories rose to 50%, high inventory needs certain time, may be longer than expected time before industry. And monetary policy fine-tuning since this year, before the Spring Festival, the central bank raised lending facilities (MLF) interest rates after the mid, and after the central bank raised its multiple deadline reverse repurchase and stock lending facilities (SLF) interest rates, interest rates from the long side interest rates to short end, up market interest rate curve, liquidity tightening signs for a more cautious attitude to the futures market operation, greatly influenced by phase current linkage. There are some unclear structural steel pipe spot market direction.

The ministry released earlier this month the first announcement to cancel the specification of 35 list of iron and steel enterprise, this is the 2012 years since its steel industry standard management, start list by "addition" change "subtraction" for the first time. Means that dissolve the iron and steel industry in 2017 will further strengthening its excess capacity.

Recently, the five ministries jointly issued by the "about further implement pressure balance policy promotes the steel market has kept running notice. "Notice" pointed out that before the recovery period of steel prices, show that the serious problem of excess steel production capacity in our country have a certain degree of improvement. Recently appeared steel prices of spot and futures markets and rapid rise in the short term, but China's steel industry oversupply problem has not been fundamentally solved. Also notice again, to crack down on illegal production and sales "groud of steel" behavior, before the end of June 2017 in accordance with the law to ban the production of construction steel power frequency furnace, intermediate frequency furnace capacity, manifests the country determined to clean up behind the capacity determination.

Clean up 2017 "groud of steel" as an important content to work capacity. Provinces such as guangdong, jiangsu, hebei, sichuan also have issued relevant documents, determined to crack down on illegal production "groud of steel" production and sales. Iron and steel industry in China has developed from incremental into the stage of development, reducing the overall production capacity surplus part of the advanced capacity are resolve, "groud of steel" must clean up all.

As a based in China, service global steel production enterprises, Shinestar group will work hard to realize the transformation and upgrading, combined with their own situation to make strategic plan, produce the high quality of welded steel pipe, seamless steel pipe, galvanized pipe, straight seam submerged arc welding pipe, carbon steel pipe, scaffolding, and other products, promote the competitiveness of the enterprise.