The Hidden Opportunities in the Steel Industry Amid Shift in Demand Structure (AI Translation)
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- China's steel industry faces overcapacity with a 9.4 billion ton apparent consumption of crude steel in 2023, profits down by nearly 24%, and an average sales profit margin of only 1.32%.
- The Chinese government's 'flat control' policy on steel production was not strictly enforced, leading to continued strong output and a lack of effective reduction in production despite environmental transformation efforts.
- Structural changes in demand are evident, with reduced domestic construction but increased exports, while the China Mineral Resources Group has struggled to significantly impact iron ore pricing negotiations despite its establishment to improve purchasing power for Chinese steel companies.
文｜财新周刊 罗国平
By Caixin Weekly's Luo Guoping
钢铁行业从2023年初的乐观，走到年尾的惨淡。
The steel industry went from optimism at the beginning of 2023 to bleakness by year's end.
据中国钢铁工业协会（下称“中钢协”）预计，2023年，中国粗钢表观消费量约9.4亿吨，意味着过剩产能超过3亿吨。中钢协重点统计会员钢铁企业前11个月利润总额788亿元，同比下降23.92%，亏损面达四成，平均销售利润率仅1.32%。“现在是赔本赚吆喝，勉强维持运营的状态。”一家大型钢企原料采购部门人士感叹。
According to the China Iron and Steel Association (hereinafter referred to as "CISA"), it is estimated that in 2023, China's apparent consumption of crude steel will be about 940 million tons, indicating an excess capacity of over 300 million tons. CISA's key statistical member steel companies reported a total profit of 78.8 billion yuan for the first eleven months, a year-on-year decrease of 23.92%. Forty percent of these companies are operating at a loss, with an average sales profit margin of only 1.32%. "It's like losing money to make noise; we're barely maintaining operations," lamented a source from the raw material procurement department of a large steel enterprise.
实际上，在上述利润统计中，不乏集团层面盈利、钢铁主业亏损的“调剂”动作。“钢厂的实际感受，远比（利润）数据要差。”河北鑫达钢铁集团H型钢公司总经理吴秀青说，多名受访人士表达了与其类似的观点。
In fact, within the aforementioned profit statistics, there are instances of "adjustment" actions where the group-level earnings are profitable while the main steel business is operating at a loss. "The actual experience of steel mills is much worse than what the profit data suggests," said Wu Xiuqing, General Manager of H-beam Company at Hebei Xinda Iron and Steel Group. Multiple interviewees expressed similar sentiments.
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