The hottest steel industry may be short of money o

2022-08-12
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The "lack of money" or "normality" of the steel industry will intensify the reshuffle in the future

the "lack of money" or "normality" of the steel industry will intensify the reshuffle in the future

China Construction machinery information

Guide: due to overcapacity and low steel prices, the whole steel industry has been in a deep profit dilemma. Now, the situation of tight funds is spreading from steel traders to steel mills. Recently, it was exposed that the capital chain of a steel plant in Jiangxi was broken and the boss ran away. In this interview, I learned that at present, there are many steel plants with tight capital, especially

due to overcapacity and low steel prices, the whole steel industry has been in a deep profit dilemma. Now, the situation of tight funds is spreading from steel traders to steel mills. Recently, it was exposed that the capital chain of a steel plant in Jiangxi was broken and the boss ran away. In this interview, it was learned that at present, there are many steel plants with tight capital, especially the survival status of small and medium-sized steel enterprises is worrying. The industry expects that in the future, when liquidity is difficult to be significantly loose, and steel stretchability and sensitivity are important performance indicators of strain sensor materials, and the industry outlook cannot rebound significantly, the tension in the capital chain of the steel industry will not be a short-term phenomenon, or become the norm

facing "tight money"

"the steel industry continues to be depressed, and the financial pressure has been transmitted from traders to steel mills." The current situation of the iron and steel industry is outlined in the words of an operator of a steel plant in Hebei. Due to serious overcapacity and weak downstream demand, the steel industry has fallen into a situation of low profits. The tightening of capital has sharply increased the survival pressure of many steel enterprises

"the recession of the steel industry in the past two years was first reflected in the steel traders, and now the second wave has begun to impact the steel mills." In an interview, the above-mentioned person said that because steel mills are relatively strong in pricing, it is steel traders who lose money first when the industry is in recession. However, after a long period of downturn, the financial pressure has begun to be reflected in small and medium-sized steel mills

"many steel traders are the first to default because of repeated pledge, excessive financing, and non recovery of funds. In addition, banks have tightened their loans to steel traders before, so the financial pressure of steel traders has appeared. Now banks are also very cautious about loans to steel mills, and the approval difficulty and approval time are stricter than before." The source pointed out that as the national credit policy does not encourage the steel industry, and the steel mills are on the verge of loss due to the recession of the industry, funds continue to "lose blood". In particular, the financial difficulties of some steel mills with poor competitiveness are more obvious

"now the orders of traders are reduced and the payment is less. In addition, it is difficult to sell steel, the inventory is large, the capital is occupied, and the capital turnover is very difficult. Moreover, the bank no longer provides active credit support to steel mills, so steel mills with poor 'hematopoietic' ability are prone to capital problems." The person said frankly

a secretary of the board of directors of a listed steel enterprise who did not want to be named also confirmed the current situation of capital tension in the industry. "At present, the shortage of funds mainly occurs in enterprises with poor competitiveness, high debt ratio and little profit. These enterprises have long-term losses and less and less working capital. If they are short-term losses, they can still wait for the industry to recover, but at present, the steel industry will maintain low profits for a long time, and those loss making enterprises will be difficult to maintain." The Secretary said that because there is no connection between business and debt, the capital crisis of small steel mills will not be transmitted to large steel mills. Moreover, large steel mills have a certain amount of bank credit, and the local government also has support. "Life" is better than small steel mills

it was also learned in the interview that due to the strict control of excess capacity by the state, many banks have tightened their credit to companies in related industries

"for surplus industries, our loan policy is to discourage the issuance and control the total amount." The credit manager of a branch of China Construction Bank said that because the steel industry is an industry with overcapacity, it is very cautious in lending

it is understood that at present, CCB implements the list system management for steel enterprises that only process steel by rolling, with the focus on accelerating the withdrawal of loans from customers outside the list. "We continue to pay attention to the state's clean-up process of steel enterprises that meet the production and operation conditions, and timely adjust the list. Generally speaking, the loans to the steel industry are being controlled as much as possible." The person said frankly

intensify the reshuffle

on the one hand, credit funds are gradually tightened, on the other hand, it is increasingly difficult to rely on the industry itself to "make blood". At present, steel prices are still in the doldrums, and the overall profitability of steel enterprises is not optimistic. The industry expects that due to the double squeeze of capital and market, the shortage of capital in the steel industry will not be able to be solved in the short term, and the tension in the capital chain will become a normal problem

according to the data of China Iron and Steel Industry Association, the market prices of building materials and hot coils rebounded slightly in early June, boosted by the rising prices of billets and futures. However, the rebound without substantial positive support was only a flash in the pan, and it returned to the decline channel after rising for a few days. At present, the steel prices of eight domestic varieties have shown a trend of shock decline since the beginning of the year. With the advent of the off-season, major steel mills have also lowered their ex factory prices

the data shows that Baosteel reduced the prices of hot and cold coils and medium plates by yuan/ton in July, and the ex factory prices have been reduced for two consecutive months; WISCO lowered the plate price in July by 200 yuan/ton; Shougang reduced the plate price by yuan/ton; Angang Steel lowered the price of cold rolled and medium plate by yuan/ton

according to the research of relevant institutions, although the steel price rebounded briefly in June, due to the impact of the "liquidity crisis" and the unchanged contradiction between supply and demand in the steel industry, the steel price will continue to decline

researchers said that China's iron and steel production capacity is seriously surplus, demand growth is weak, and market competition is fierce. The situation of low profits in the whole industry will remain for a long time, and the reshuffle of the whole industry has begun to intensify

"at least in the future, banks will not 'help in the snow' with spring tension and compression testing machines, spring change testing machines and spring fatigue testing machines." The researcher believes that the bank capital will not be too loose in the future, which will have an impact on the steel industry. Although those uncompetitive small and medium-sized enterprises will have a lot of financial pressure in the short term, and even have capital fractures, it will be more effective to squeeze out backward production capacity from the capital level than to eliminate production capacity through administrative means. In the long run, relying on the market for survival of the fittest is of great benefit to industrial adjustment. "Therefore, from the perspective of structural adjustment, the capital shortage in the steel industry will not be a short-term phenomenon, but may be normalized." The friction is mainly caused by the fluid film formed by the lubricant, insiders said frankly

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