Since the first half of last year, steel prices have begun to recover due to a series of measures such as supply-side reforms and elimination of backward production capacity. Taking rebar as an example, the average price on March 9 last year was 2475 yuan / ton, and on March 9 this year, it had risen to 3852 yuan / ton, an increase of 35%.

Benefiting from the rise in steel prices, the performance of steel companies improved markedly last year. In 2015, Nangang, Liugang and * ST Shaogang lost 2.432 billion yuan, 1.189 billion yuan and 2.596 billion yuan, respectively. Steel companies achieved profits of 350 million yuan, 185 million yuan and 101 million yuan respectively.

According to statistics from the China Iron and Steel Association, in 2016, the total sales revenue of large and medium-sized steel enterprises reached 2.80 trillion yuan, down 1.81% year-on-year, but the total profit turned from a loss of 84.7 billion yuan in 2015 to a profit of 30.378 billion yuan. The domestic steel industry as a whole achieved Turning losses into profit.

Since 2016, the steel industry has also begun the process of capacity reduction, but according to the National Bureau of Statistics, China's crude steel, pig iron, and steel production in 2016 were 808 million tons, 701 million tons, and 1.139 billion tons, an increase of 1.24% year-on-year. 0.74%, 2.30%; China's crude steel production accounted for 49.6% of global output, an increase of 0.2 percentage points year-on-year; domestic crude steel consumption was 709 million tons, an increase of 2.08% year-on-year. It can be seen that the reduction in production capacity does not directly affect the output of the steel industry, so the price surge should be closely related to the fluctuation of demand.

On March 5, the government work report this year clearly stated, "This year we will further reduce the steel production capacity by about 50 million tons, and withdraw coal production capacity by more than 150 million tons. At the same time, we will eliminate, suspend construction, and postpone the construction of coal power production capacity of more than 50 million kilowatts. , To prevent and resolve the risk of overcapacity in coal power generation, improve the efficiency of the coal power industry, and make room for the development of clean energy. "

Although this year's target has been reduced from 65 million tons of steel production capacity and 290 million tons of coal production capacity last year, considering that most of the steel capacity removals last year were ineffective capacity, and output is still at a record high, this year's supply-side capacity reduction is expected Going further in the substantive direction, especially the production capacity of ground steel will be completely eliminated in the first half of the year, which will have a substantial impact on market supply.

As the market enters the "golden three silver four" consumption season, there is an expectation of further improvement in demand. On the supply level, the National Development and Reform Commission made it clear that in the first half of the year, the production capacity of industrial frequency furnaces and intermediate frequency furnaces will be completely banned. During the two sessions, the production capacity of steel plants in North China will be limited to 50%, and the Ministry of Environmental Protection ’s irregular environmental supervision will affect the overall supply. Especially the supply of construction steel will still be significantly inhibited.

Nangang

On March 10, 2017, Nanjing Iron & Steel Co., Ltd. issued an announcement of the pre-increased performance for the first quarter of 2017. In the first quarter of 2017, the company is expected to realize net profit attributable to shareholders of listed companies of RMB 400-500 million, with a significant year-on-year increase in performance.

While enhancing the competitiveness of the steel business at the current stage, the company continues to promote transformation and upgrading. It plans to integrate existing multi-industry resources and foreign investment platforms, focusing on the development of energy-saving and environmental protection, smart manufacturing, Internet + and other emerging industries, and actively docking Nanjing Jiangbei New District development plan. In 2015, the company invested in the establishment of Jinkai Energy Conservation and Environmental Protection Investment Holdings Co., Ltd. and integrated the existing energy conservation and environmental protection business within the company into the Jinkai Energy Conservation and Environmental Protection platform, which provided the foundation for the development of the company's energy conservation and environmental protection industry. In the next step, the company intends to focus on the fields of solid waste treatment, sewage treatment and waste heat power generation through cooperative introduction + independent integration, and realize the implementation of energy-saving and environmental protection projects as soon as possible.

Liugang

Is the only comprehensive steel production enterprise in Guangxi, and it has an absolute dominant position in the Guangxi steel market. At the same time, the company is also expanding the market to neighboring provinces such as Guangdong and Hainan, and assigning technical personnel to stay in Guangdong. In 2015, the company's building materials products' share in the Guangxi market increased significantly. In the first half of 2016, the railway freight rates of the company's steel products were further discounted, and Yun, Gui, Sichuan and Changsha, and Guangzhou will become regional markets with consistent transportation costs. In addition, the company's e-commerce platform timely launched spot sales, auction sales, forward transactions and other transaction models to develop key projects and direct supply to end users.

* ST Shaogang

* ST Shaogang released its 2016 annual report. During the reporting period, the company achieved operating income of 13.973 billion yuan, an increase of 25.38% year-on-year; operating costs of 13.326 billion yuan, an increase of 6.40% year-on-year; realized a net profit attributable to shareholders of listed companies of 101 million yuan over the same period last year The loss was 2.596 billion yuan; in 2016, the EPS was 0.04 yuan, compared with -1.07 yuan in the same period last year.

The company is the largest steel enterprise in Guangdong Province, and its main products, rebar, wire rod and ship plate, account for 13%, 16% and 10% of the province's market respectively. The company's successful performance in 2016 turned losses into profits mainly due to the recovery of the industry's economy, the increase in non-recurring income and the optimization of expenses.