China's crude steel output grew by 9.1% in the first August

Since this year, domestic iron and steel production has maintained a high-speed growth. According to the data of the National Bureau of Statistics, the average daily output of crude steel in August 2019 was 2815,000 tons, pig iron in August 2296,000 tons and steel in August 3432,000 tons.

Pig iron output in August 2019 was 71.17 million tons, an increase of 7.1% over the same period of last year; Pig iron output in January-August was 54.47 million tons, an increase of 6.9% over the same period of last year. The crude steel output in August was 87.25 million tons, an increase of 9.3% compared with the same period last year, while the crude steel output in January-August was 66.48.7 million tons, an increase of 9.1% compared with the same period last year. In August, steel output reached 106.39 million tons, an increase of 9.8% compared with the same period last year; in January-August, steel output reached 803.67 million tons, an increase of 11.0% compared with the same period last year. It is worth noting that, with the rapid increase of steel production, the steel market has basically bid farewell to the "feast" brought by the previous supply-side structural reform since the cliff-like decline in November 2018. The performance of Listed Companies in the iron and steel industry is also worrying. Net profit in the first half of the year generally fell sharply, with a drop of up to 90%.

According to the Ministry of Industry and Information Technology on September 2, in the second half of the year, domestic iron and steel production has maintained a relatively high growth, resulting in continuous low-level shocks in the steel market, with obvious off-season effect. Many enterprises in Shandong, Shanxi, Sichuan, Shaanxi, Gansu and Xinjiang have taken the initiative to stop production restriction and overhaul to reduce the supply of crude steel, limit production and increase efficiency, and digest the existing high-price stock. We should jointly maintain market price stability and effectively guard against market risks.

In view of the high output of domestic steel enterprises, Gao Xiangming, president of China Iron and Steel Association, pointed out at the fifth and tenth executive directors'meeting of China Iron and Steel Industry Association (hereinafter referred to as "China Iron and Steel Association") held on July 29 that from the operation of the steel industry in the first half of 2019, some new situations and problems have arisen, which should be caused. The whole industry pays close attention to it. In particular, he pointed out that behind the high growth in iron and steel production, it is urgent to find out who is increasing production.

After June 30, 2017, the production capacity of strip steel should be retreated, and the situation of "inferior currency expelling good currency" has been improved. The high-quality production capacity of the steel industry has been effectively brought into play. In the second half of that year, 75 million tons of steel produced by non-member enterprises can be regarded as legitimate production, and there is no "strip steel" production in the first half of 2019. Non-member enterprises produced 128.43 million tons of steel, an increase of 53.43 million tons over the second half of 2017, an increase of 71.24%. It is urgent to find out who these enterprises are, whether these capacity conforms to the regulations, whether they conform to industrial policy and environmental protection policy.

According to the latest speech released on the website of SISCO on September 12, Secretary-General He Wenbo, Executive Vice-President and Secretary-General of the CPC Committee of SISCO also indicated that, on the one hand, the task of deepening the structural reform on the supply side is very urgent; on the other hand, for some time, affected by the rebound of steel prices and the improvement of industry efficiency, he Wenbo also said that the task is very urgent. The impulse to increase smelting capacity, to engage in "digital games" in the replacement process of capacity reduction, and the risk of the resurgence of "floor steel" are all increasing. The game between the old and new development concepts of one-sided pursuit of expansion of quantity and emphasis on quality and efficiency is in a collision situation.

He believes that all kinds of signs indicate that the structural reform of the supply side of the iron and steel industry has entered the critical stage of "ship to midstream, a pool of slack energy is retreated in a thousand ways", and it is necessary to strive hard to break out of the dangerous beach.