Cummins Parts,Cummins Spare Parts,Cummins Performance Parts,Original Cummins Parts JINING SHANTE SONGZHENG CONSTRUCTION MACHINERY CO.LTD , https://www.stszcmparts.com
September steel company efficiency fell most difficult in the fourth quarter
In the second China High-Tech Forum on Iron and Steel Technology held in 2013 by the China Metal Society, industry leaders highlighted the severe challenges currently facing the steel sector. Wang Tianyi, executive vice president of the China Metal Society, emphasized that the industry is experiencing unprecedented difficulties, which are expected to persist for an extended period. These challenges are primarily driven by a sharp drop in operational efficiency and increasing financial strain on companies.
On one hand, the rapid expansion of steel production capacity, combined with rising ore prices and declining steel prices, has led to a significant decrease in industry profitability. On the other hand, corporate debt levels have continued to rise, resulting in reduced internal capital and tighter liquidity conditions. Some companies are even at risk of breaking their financial chains.
Wang noted that these issues stem from long-term economic policies favoring expansion and inefficient corporate management. He added that the complexity of these factors, along with domestic and international economic fluctuations, means that the current challenges will likely last for years. “It may take 5 to 10 years before things improve,†he said.
Qu Xiangxiu, deputy secretary-general of the China Iron and Steel Association, pointed out that the most difficult period for the industry could be in November and December, as winter typically leads to lower demand in northern regions. However, the government plans to maintain stable macroeconomic policies without large-scale stimulus measures. Instead, efforts will focus on urban rail construction, energy conservation, environmental protection, and new urbanization projects. As a result, steel demand is expected to grow slightly in the fourth quarter of 2013.
Qu Xiuli also noted that while global economic growth remains slow, China continues to lead among major economies. The country is projected to achieve a 7.8% growth rate in 2013, maintaining steady development. Although steel demand will continue to rise, the increase is expected to be modest due to financial constraints, resembling a small upward trend rather than a strong surge.
Li Xinchuang, another deputy secretary-general of the China Iron and Steel Association, highlighted that despite high crude steel production and decreasing steel inventories, steel prices have not improved significantly. Ore prices remain elevated, making it difficult for the market to recover. “The key to understanding late September’s steel market trends lies in investment and manufacturing activity,†he stated.
According to data from the China Iron and Steel Association, the average daily output of crude steel in key national steel enterprises increased by 0.07% in the second half of August 2013, reaching 1.7042 million tons. In the same period, the average daily output was estimated at 2.1992 million tons, marking a slight monthly increase. Meanwhile, steel inventories have declined for 25 consecutive weeks, with a total reduction of 35.51%.
The Tangshan billet index also showed a downward trend in September. From September 2 to September 13, the index fell from 96.5 to 93.6, continuing its decline within a bearish channel. This reflects ongoing pressure on the steel market, highlighting the need for strategic adjustments and long-term planning to navigate the current challenges.