As the rise of optoelectronic information, new energy, new materials and biotechnology, undoubtfully nowadays steel is still important to world economy: world annual steel production reaches up to 1.6 tons with the total amount USD 900 billion. From ships to skyscrapers, from cars to cooking utensils, steel remains essential for industry manufacturing and daily life.
Steel Industry Making Difficult Adjustments
In 2016, under the circumstances of overcapacity, continuous price drop, whopping losses of the whole industry, China’s steel market was affected by lots of positive factors such as improved steel demand,lowest level of steel inventory, improved quality and raised efficency of the industy and enterprises, and steel price fluctuated to go up and eventually the whole industry turned around from the situation of whopping losses and achieved profitability.
In 2017, China’s steel industry is entering into development stage of “production cut” and production of crude steel and low quality product will be cut massively. Steel demand in construction, machinery, home appliance and energy industries will decline; although steel demand in automotives, rail ways industries will increase, such increase is not enough to stimulate the overall growth. It is estimated the steel demand in 2017 will slightly drop.
Oversea markets become the new growth momentum.
From oversea market perspective, driven by strong performance of the new emerging markets, global economic growth in 2017 will be slightly accelerated and world economic recovery will lead to growth in steel demand. Mr. Herrick Lau, CEO of Crownia Holdings Ltd, states that 2017 is the year when Chinese government will promote Belt and Road actively, the construction of which will efficiently drive the direct or indirect steel exports， Decreasing export tax on steel billets in 2017 is a positive factor for steel exports. Besides, the down trend of RMB exchange rate is another positive factor that will bring competitive advantage for exporting steel. Backed up by above factors, China’s steel exports is estimated to exceed 100 million tons in 2017.
At present, the theme of China’s iron and steel industry development changes from “increment and expansion” into “reduction and adjustment.” During the process of fierce reforms, the steel industry needs to adjust the industrial structure, upgrade the technological transformation and upgrade the product quality; on the other hand, it needs to adjust and innovate in the aspects of trade model, the marketing channel and the overseas market layout.
From: DAWA BUSINESS PRESS (NA Business A3 ) http://epaper.dawanews.com/20170408/0401532001491621103?from=groupmessage&isappinstalled=0