"In 2015, the world economy will continue its moderate recovery. China will continue to maintain a basically stable macro-control policy. The reform dividend will continue to be released and the economy is expected to maintain steady growth. However, the macro economy is generally facing downward pressure. The market and environmental protection will be more restrictive to the industry. Obviously, China's steel industry will usher in the 'integrated promotion year' of 'deepening internal reforms and promoting transformation and development'." Recently, Qu Xiuli, vice president of China Iron and Steel Industry Association, pointed out the operation situation of the steel industry in 2015.
Production growth slows down steel prices, investment declines, exports increase
In 2014, affected by the macroeconomic downturn and the slowdown in domestic demand growth, the steel industry continued to face severe conditions of overcapacity and oversupply in the market, but some new features have emerged in economic operations.
First, the growth rate of steel production dropped significantly. According to the data released by the National Bureau of Statistics, in 2014, China's crude steel, pig iron and steel production were 823 million tons, 712 million tons and 1.126 billion tons, respectively, up 0.9%, 0.5% and 4.5% year-on-year; average daily crude steel 225.4 Tens of tons, although the level of Nissan is still high, but the growth rate of production has fallen sharply.
Second, steel prices continued to fall. In 2014, due to the weak demand for steel and the oversupply of the market, steel prices showed a downward trend. According to the Steel Association, as of the end of December 2014, the comprehensive steel price index was 83.09 points, down 16.05 points year-on-year, a decrease of 16.19%. In addition to a slight rebound in prices in April and October, the other months showed a unilateral downward trend, and the monthly price indices were lower than the same period of the previous year, reflecting the more intense market competition.
Third, the fixed assets investment in the steel industry has declined. In 2014, fixed assets investment in the steel industry decreased by 3.8% compared with the same period of 2013. Among them, black mine investment increased by 2.6% year-on-year, and investment in ferrous metal smelting and rolling industry decreased by 5.9% year-on-year, which continued to decline on the basis of the previous year's decline. This shows that the country has achieved certain results in strictly controlling new capacity projects.
Fourth, steel exports have grown substantially. In 2014, China's cumulative export of steel products was 93.78 million tons, a year-on-year increase of 50.5%; the cumulative import of steel products was 14.43 million tons, an increase of 2.5%; the import of iron ore was 933 million tons, an increase of 13.8%. Although the export volume increased significantly, the export price dropped more. Compared with the same period in 2013, the average price of steel exports fell by 11.5%, and the import price rose by 2.5%.
Industry benefits improve different business differentiation
In 2014, the economic benefits of the steel association members of the steel association improved, and the overall operation of the steel industry was relatively stable, but the overall business situation was more severe, and the business conditions among enterprises were different.
Profits and taxes were realized, profits were maintained, and the loss and loss were also reduced. In 2014, the steel industry members of the steel association realized that the top 10 profits accounted for 60% of the total profit, of which 7 companies achieved profit growth; the top 10 companies lost 90% of the total loss, of which 4 The home business was lost due to profit and loss, and the two companies increased their losses year-on-year. The differentiation of operating conditions among steel companies has intensified. In 2014, the average sales profit rate of member steel companies was 0.85%, an increase of 0.26 percentage points year-on-year. Qu Xiuli pointed out: "The profit margin of steel enterprises has increased at the lowest level in the industrial sector, although it has increased year on year."
The sharp increase in profit from the main business was the main reason for the improvement of corporate profitability. At the same time, the increase in investment income and non-operating income also provided support for the improvement of profits. Other non-steel profits decreased significantly. Qu Xiuli pointed out that in the case of a sharp drop in steel settlement prices, the supply and demand of major raw materials such as iron ore and coal changed, and the price decline significantly expanded, especially the trend of iron ore prices falling sharply in 2014. It is the most important factor for the improvement of the efficiency of steel enterprises. In addition, enterprises have strengthened internal management, benchmarking potentials, saving energy and reducing consumption, resulting in a significant decline in steel production costs.
According to the statistics of the Steel Association, in 2014, the actual settlement price of member steel enterprises (excluding value-added tax) fell by more than 300 yuan per ton, a drop of more than 10%. In the same period, the purchase cost of imported iron ore by member steel companies fell by more than 20% year-on-year, and the cost of domestic iron ore purchases fell by nearly 16%, both of which fell more than the decline in steel prices.
At the same time, the period expenses increased year-on-year. In 2014, the total cost of member steel companies increased by 5.62% year-on-year. Among them, management expenses decreased year-on-year, and financial expenses and sales expenses increased year-on-year, and the increase rate was large. This shows that enterprises are working hard to strengthen management and reduce costs. At the same time, it also reflects that sales and funds are more difficult, resulting in a significant increase in sales expenses and financial expenses.
In addition, iron and steel enterprises have generally strengthened their fund management, and the inventory cycle of raw materials and materials has been greatly shortened, reducing capital occupation. At the same time, enterprises actively expanded financing channels and controlled the scale of bank loans, and the industry's asset-liability ratio declined year-on-year.
Increased demand is less difficult to increase efficiency
In 2015, the world economic development will continue the mode of moderate growth. The economic growth of western developed countries may be divided, and the growth of emerging economies will still be weak. The world economy will maintain a small growth trend, and steel demand is expected to maintain a small increase.
The World Economic Outlook report released by the International Monetary Fund in October 2014 predicts that the global economy will grow by 3.8% in 2015, an increase of 0.5 percentage points over the growth rate in 2014. The International Steel Association released a report in October 2014, predicting that the growth rate of global steel apparent consumption in 2015 will continue to maintain a growth rate of 2.0% in 2014, and the performance consumption will reach 1.594 billion tons.
On the domestic front, the Central Economic Work Conference made it clear that in 2015, China’s economy adhered to the general tone of work in a stable and progressive manner, insisting on improving the quality and efficiency of economic development, actively adapting to the new normal of economic development, and shifting the mode of transfer and restructuring. Important location. Focusing on the implementation of the “One Belt and One Roadâ€, the coordinated development of Beijing-Tianjin-Hebei, and the Yangtze River Economic Belt, the new urbanization strategy will be steadily advanced, and infrastructure construction such as water conservancy and railways will maintain a high level, which will promote the continued growth of steel demand. At the same time, with the country's transformation and development and industrial upgrading, consumption has played a role in driving economic growth. This change means that the intensity of steel consumption will decline, and the growth rate of steel demand will gradually slow down. Taken together, steel demand will continue to increase in 2015, but the increase will not be too large.
The year 2015 is the first year for China to comprehensively promote the rule of law, and it is also a crucial year for comprehensively deepening reforms. Policies to resolve overcapacity, promote mergers and acquisitions, clean up local tax incentives, crack down on non-invoice settlement, ban fake and shoddy products, and establish a fair market environment will be further implemented. Construction, finance and insurance will also be included in the scope of “reform of the campâ€, which will help alleviate the tax pressure of enterprises.
In addition, due to the intricate foreign trade environment, the country has cancelled the export tax rebate for boron-containing steel. It is expected that the growth rate of steel exports will decline in 2015. The end of the US quantitative easing policy and the expectation of raising interest rates will directly push the US dollar to strengthen, making the overseas financing costs of enterprises rise and the risk of exchange losses increases. The domestic banking system will still strictly control the scale of credit for steel companies and steel trade industries, and corporate capital pressure will continue to exist. At the same time, environmental protection and labor costs will further increase, and it will be more difficult for steel companies to improve economic efficiency.
On the whole, in 2015, the domestic steel market will still be in a situation of oversupply, and the steel price is not in a situation of sharp recovery; the oversupply pattern in the iron ore market will become more apparent, and the current situation of oversupply in the coal industry will continue. It is expected that in 2015, the market for raw materials such as steel and iron ore and coal will be difficult to reverse, and prices will remain at a low level.
Facing the new normal innovation and seeking development
In the next step, the development of the steel industry will continue to face the new normal development pattern characterized by “overcapacity, lack of demand, fierce competition, and enterprise differentiationâ€. How to improve the quality and efficiency of operation? In this regard, Qu Xiuli made five suggestions.
The first is to recognize the new normal, adapt to the new normal, and cope with the new normal. Iron and steel enterprises should raise their understanding of the new normal of China's economy and the new normal of the steel industry, use innovative ideas to plan enterprise development, scientifically formulate corporate development strategies, and enhance the competitiveness of enterprises in the market. Among them, the most important thing is to change the development concept, change the traditional development model that relies on scale expansion, rely on resources and energy consumption to support the development of the steel industry, and truly realize the healthy and sustainable development of variety, quality, efficiency, environmental protection and harmony.
The second is to identify the market positioning and carry out differentiated competition. According to the target consumer market and target customers, iron and steel enterprises should identify the market positioning, grasp the trend of key users' demand and product upgrading, optimize the variety structure in time, increase the intensity of technological innovation, strive to improve the quality of varieties, and cultivate and build market competitiveness. Core Products. Through differentiated competition, innovative marketing models, improved service levels, avoiding disorderly competition in the market and improving the overall profitability of the company.
The third is to revitalize the stock assets and ensure the safety of the capital chain. Iron and steel enterprises should further strengthen the management of funds, especially to revitalize the existing stock of funds, effectively compress the inventory of finished products, clean up the invalid investment; adhere to the operating principle of “no money, no deliveryâ€, strictly control accounts receivable, accelerate capital turnover, and improve The efficiency of using funds and reducing the debt ratio. At the same time, it is necessary to further do direct and overseas financing work, expand financing channels, reduce financing costs, and vigorously reduce financial expenses; it is necessary to pay close attention to capital chain security and prevent capital risks.
The fourth is to promote lean management and achieve optimal operational efficiency. Iron and steel enterprises should improve management level, promote lean management, and promote the optimal transformation of enterprises from single benefit to optimal system efficiency; carry out benchmarking and tapping potential, attach importance to the integration of various resources and information, and take effective measures to further reduce iron ore. The procurement cost of raw materials such as coal, optimize the batching structure, reduce the process cost; improve product quality, increase product added value, deepen the internal potential of the enterprise through standard management and system optimization, timely transmit market pressure, and improve the overall operational efficiency of the enterprise.
The fifth is to actively promote internal reforms and enhance the vitality of the enterprise market. In the face of an increasingly fierce market competition environment, steel companies must accelerate the pace of internal reforms, transform internal management mechanisms, and adapt to changes in the raw materials market and steel market by establishing a sensitive and efficient operating system; formulating a scientific and effective evaluation and incentive system to mobilize employee enthusiasm To enhance the vitality of the company. By deepening reforms, we will unlock the potential of enterprises, increase labor productivity, and enhance the comprehensive ability of enterprises to adapt to the market.
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