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Chinese Steel Weekly-20151228

 

1. According to the review made in National Industry and Information Technology Working Conference held on December 24th in Beijing, it was predicted that 13 million tons iron making capacity and 17 million tons steelmaking capacity have been eliminated in 2015, which represented a promising result of overcapacity elimination.

MPI's comments: In 2016, some tasks should be carried out to remove overcapacity actively and properly such as accelerating optimization and upgrading of conventional industries, formulating a master plan to promote industrial regrouping and deal with zombie steel companies, releasing support measures to quit the zombie companies properly, developing the pilot base for overcapacity elimination, as well as launching environmental friendly manufacturing projects.

2. Based on the latest data released by the National Bureau of Statistics of the PRC, the total profit of industrial enterprises with annual revenue of 20 million yuan or more was 5.53868 trillion yuan from January to November 2015, decreased by 1.9% year-on-year. And the profit of ferrous metal smelting and rolling processing industries decreased by 68%.

MPI’s comments: The steel industry was experiencing hard times with low profitability due to oversupply in the market. Steel companies must propose the development plan of capacity reduction for survival with a clear consciousness of market situation. Those companies who expecting a better situation are possibly to be rejected by the market earlier.

 

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