Steel industry has entered a weak growth cycle

With the disclosure of annual reports of listed companies in the iron and steel industry nearing the end, the disclosure of the first quarterly report has also begun. Compared with the performance of the bleak annual report, the first quarter results of the listed steel companies have been mixed, and some companies' operating results have improved.

According to statistics, some listed steel companies such as Liugang Steel achieved a sales income of 9.4 billion yuan in the first quarter, a year-on-year decrease of 3.8%. Shougang Steel achieved a total sales revenue of 2.8 billion yuan in the first quarter, down 2.5% year-on-year. The business situation is still not satisfactory. , But there are also some listed steel companies' performance in the first quarter is remarkable. According to the data provided by "Flush Flush," Jiuli Time achieved a revenue of 666 million yuan in a quarterly report, an increase of 4.42% year-on-year. Xining Special Steel achieved an operating income of approximately 1.691 billion yuan, an increase of 0.21 billion yuan month-on-month, and Changbao's results showed a slight increase. In the first quarter, operating income reached 884 million yuan, a year-on-year increase of 1.08%.

It is understood that due to the gradual popularization of special steel in the market in recent years, the special steel enterprises that currently produce stainless steel and other products on the market are in a better operating condition than the ordinary steel. In the context of the current elimination of secondary steels in the entire industry, the promotion of high-strength steel has become a trend. The performance of the first quarterly report of the long-established material with a strong competitive advantage in the field of new energy pipes has been highlighted by market participants.

The improvement in the operating conditions of Xining Special Steel is mainly due to the decline in self-owned mining revenue and financial expenses. According to the announcement, the ore price rebounded significantly since the first quarter, and the average price of domestic refined iron concentrate was 1,027 yuan/ton, up 12% month-on-month, and the profitability of Xining Special Steel’s own mines improved significantly. In addition, the company’s financial expenses in the first quarter were RMB 114 million, a decrease of RMB 26 million year-on-year, which has a significant effect on the improvement of the company’s operating conditions in the first quarter.

Shanghai Securities's R&D report pointed out that the overall downturn in the listed steel companies' performance is expected. Although there are some stocks that may go against the trend, there is room for further fluctuations in the steel index in the future. “For the steel plate, investors should be cautious in addition to some special steel or stocks with backgrounds.”

He Hangsheng, chief editor of the business club's steel company, said that although the downstream demand for steel in the first quarter of this year was weak, the steel mills' behavior of raising ex-factory prices still supported the improvement of the operating performance of some listed steel companies.

“However, with the continued decline in steel prices, many steel mills have lowered the ex-factory price of steel in May, and the downstream demand has still not improved.” He Hangsheng predicted that the performance of listed steel companies in the second quarter may be Deteriorated from the previous quarter.

However, it is worth noting that, in terms of demand, the steel industry has entered a period of weak growth. Wu Wen, general manager of “Steel House”, predicts that domestic crude steel consumption will enter a low growth period from 2013 to 2015, and will then enter a period of stable development, and it is expected to decline before and after 2020. It is only that “current steel companies with cost advantages in China are still continuing to expand their production capacity, and oversupply pressure in the steel industry is unlikely to be alleviated in the short term.” In the next three years, the domestic steel market is still facing severe competition, and steel prices will remain at low levels.