Lange Steel experts interpret the impact of environmental protection and limited production in autumn

Since the beginning of this year, strict environmental protection has never stopped. Under the banner of “Blue Sky Defence War”, various localities have introduced environmental protection measures, among which the steel industry has become the main area for controlling emissions. For example, in early July, the Tangshan Municipal Government issued the “Tangshan Iron and Steel, Coking Super Low Emissions and Coal-fired Power Plant Deep Reduction Implementation Plan”. Within a month, Tangshan government units issued policies to limit production to 12 times.

       Wang Guoqing, director of the Lange Iron and Steel Research Center, told the financial reporter that the “Blue Sky Defence War” has blossomed in all parts of the country. The environmental protection and production of the steel industry and the ultra-low emission transformation have continued to be upgraded and expanded. At present, the environmental protection policy for the steel industry Nothing is stricter and stricter. At the same time, Tangshan, a steel town, has also heard news that the heating season may be implemented ahead of schedule, making the steel market's hype enthusiasm unabated.

       The relevant person in charge of Fangda Iron and Steel Group told reporters that since environmental protection and production restrictions are not implemented for the first time, enterprises have long expected that the market will have higher expectations for environmental protection and limited production. Jiangsu Shagang Group, Shougang Group and other listed steel managers also have Expressed the same view to reporters.

       The reporter noted that with the in-depth advancement of the work capacity in the previous two years and the efforts to combat the strip steel, the overall market environment is better. Due to the increase in concentration, the relevant policy coordination capabilities have also been greatly improved. This has reduced the impact of environmental protection and production restrictions on enterprises.

The reporter was informed that although the environmental protection and production limit, but the country's crude steel and steel output still grows by a large margin, and constantly hit a new high. Statistics show that in the first half of this year, the country's crude steel output was 451.16 million tons, up 6% year-on-year; steel output was 530.85 million tons, up 6%, and the growth rate was increased by 4.9 percentage points. In June, the national crude steel output was 80.2 million tons, up 7.5% year-on-year; the steel output was 95.51 million tons, up 7.2%.

       Why is the country's crude steel and steel output able to continue to grow by a large margin? "Of course, it is driven by consumer demand. Because in the market economy, there is demand for production. Only in the case of smooth sales and profitability, steel companies have the incentive to continue to increase production. Otherwise, waiting for the company can only be products. A large backlog, * eventually bankruptcy," Chen Kexin, chief analyst of Lange Steel Research Center, told reporters.

       The reporter noted that since the beginning of this year, the national steel social inventory and steel enterprise stocks have not increased significantly, even from the previous inventory highs. From this perspective, the national crude steel and steel production in the first half of this year, including The substantial increase in volume has basically turned into consumption. In other words, the amount of new crude steel resources in the first half of this year (concurrent production plus imports) is about 458.18 million tons, and the actual consumption of crude steel in the same period should be this figure, about 460 million tons.

       The data of China Iron and Steel Association (hereinafter referred to as “China Steel Association”) also showed that in the first half of the year, the steel enterprises of China Steel Association realized a total profit of 139.273 billion yuan, a year-on-year increase of 151.15%; the sales profit rate basically reached the national industrial enterprises above designated size. Profit level.

       In the context of profit and demand support, steel companies in the second quarter of the relaxation of environmental protection and production, have begun to increase their production, and actively increase production to prepare for the strict environmental protection and limited production that may come in the autumn and winter of the second half. Wang Guoqing told reporters that this brought a rebound in steel stocks in these months. However, in the context of environmental protection and production restrictions, how do these steel companies maintain production? After inquiring to some steel companies, the reporter found that the company mainly uses high-quality ore in the blast furnace and increased scrap in the converter to increase production. This is the optimization of raw materials and technical improvement. The environmental protection inspection team mainly focuses on enterprises that are not up to standard, so these environmental standards are up to standard. Companies can increase production.

       Then, in the second half of the year, can this steel consumption market be maintained? From the current point of view, the demand for steel is still at a high level. In view of the relatively weak transportation sector in infrastructure investment in the first half of the year, many places have announced plans for major project investment in the second half of the year, and the investment scale in the transportation sector may reach trillions. At the beginning of August, the China Railway Corporation confirmed that “the fixed investment of railways will return to more than 800 billion yuan in 2018”, and the original planned arrangement of 732 billion is a low year since 2014. In addition to the Sichuan-Tibet Railway, Hetian to Ruoqiang, Xining to Chengdu, Yancheng to Nantong, Nanchang to Jingdezhen to Huangshan, Changsha to Yiyang to Changde Railway are all scheduled to start construction in the second half of 2018, and the acceleration of railway infrastructure investment is quite obvious.

       Wang Guoqing predicted to reporters that although the environmental protection will continue to exert force in the second half of the year, it will form a certain restraint on the release of production. From July 20th, Tangshan will start a 43-day emission reduction and limit production. The output of Wu'an Steel Enterprise's high furnace limit will increase from 15-20% in the second quarter to 25-35% in the third quarter. The policy measures such as the blue sky defense war and the heating season limit production will also become an important constraint factor for the steel market supply. It is expected that the cumulative steel output in the second half of the year will be significantly lower than the first half. Since July, the social stock of steel has changed from rising to falling, and the inventory pressure in the second half of the year is not large, and this will better support the listed steel enterprises to complete the annual business objectives.