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How the steel industry will operate in 2019

In 2019, the steel industry will continue to push forward supply-side structural reforms, consolidate production capacity achievements, accelerate structural adjustment, transformation and upgrading, promote high-quality development throughout the industry, and maintain overall stability in the industry.

First, crude steel production again reached a new record high. In 2019, china's pig iron, crude steel and steel production reached 809 million tons, 996 million tons and 1,205 million tons, respectively, up 5.3%, 8.3% and 9.8% year-on-year, respectively. In 2019, the demand of the steel industry is better, the operation of downstream industries such as infrastructure and real estate is stable, and the apparent consumption of domestic crude steel is about 940 million tons, up 8% YoY.

Second, steel imports and exports both fell. According to the General Administration of Customs, China's cumulative exports of steel from January to December 2019 were 64.293 million tons, down 7.3% YoY, while total exports amounted to US$53.76 billion, down 11.3% YoY. The cumulative import of steel was 12.304 million tons, down 6.5% YoY, while the cumulative import value was US$14.11 billion, down 14.1% YoY.

Third, steel prices fluctuate in a narrow range. Steel prices were generally stable in 2019, with a narrow fluctuation. It reached a high of 113.1 in early May and dropped to a year-low of 104.3 points at the end of October. The average price index of Chinese steel for the year was 107.98 points, down 6.77 points, or 5.9%, from a year earlier.

Fourth, the price of imported iron ore rose sharply. According to the General Administration of Customs, China's total imports of iron ore in 2019 amounted to 1.07 billion tons, up 0.5% YoY, with imports amounting to US$101.46 billion, up US$26.64 billion, up 33.6% YoY, and the annual average price was US$94.8/tonne, up 34.3% YoY. Compared with last year, the total import volume remained stable at the same time, the import price rose sharply, which had a greater impact on the downstream steel manufacturing profits.

Fifth, the economic benefits fell sharply. Due to the accelerated growth of steel production, steel prices show edified downward trend, iron ore and other raw materials prices, such as factors, the economic benefits of steel enterprises fell sharply. In 2019, China Iron and Steel Association member steel enterprises achieved sales revenue of 4.27 trillion yuan, up 10.1% YoY;

2020 is the year of the 13th Five-Year Plan, and the development of steel is facing a complex and changing situation. The whole industry will, in accordance with the requirements of the Central Economic Work Conference, adhere to the supply-side structural reform as the main line, consolidate the effectiveness of steel de-production capacity, improve the level of greenness and intelligence in the steel industry, improve quality and efficiency, and promote the high-quality development of the steel industry.

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