Since last November, supply side reform has become a
high-frequency word, widely concerned by public opinion. What is
supply-side reform? It is to start from the supply and production end,
through the liberation of productivity, enhance competitiveness to
promote economic development. Specifically, we will cut overcapacity,
reduce inventory, deleverage, cut costs, and strengthen areas of
weakness. Among them, overcapacity was placed in the first place, which
is a strong medicine and good medicine for the iron and steel industry
with serious overcapacity.
According to cISA data, from January
to November 2015, the national crude steel output of 738.38 million
tons, down 2.2% year on year, the same period last year for 1.9% growth;
Steel output was 1,028.12 million tons, up 1%, or 3.5 percentage points
lower than last year. In the first 11 months, key iron and steel
enterprises suffered a total loss of 53.132 billion yuan, a record.
Although the data show that China's crude steel output in 2015 for the
first time negative growth, released a positive signal to the market,
but the iron and steel enterprises continue to high losses, reflecting
the difficult survival of the iron and steel industry. In 2015, the
steel industry broke out again due to the failure of the capital chain
caused by steel enterprises, bankruptcy phenomenon, making steel
enterprises at the edge of the "line of life and death". Steel
enterprise reform has reached the "arrow, have to send" degree.
According
to rough estimates, China's crude steel production capacity is about
1.2 billion tons, oversupply is the most fundamental problem of the
steel industry. In addition to the "root of the disease" not only to
prohibit the construction of new capacity projects, more important is
for the existing iron and steel enterprises, especially those half-dead
"zombie enterprises", accelerate the pace of its bankruptcy exit from
the market, so as to achieve excess capacity, reduce the market supply
pressure, achieve the purpose of industrial balance and balance between
supply and demand. The government also through strengthening
environmental protection, energy consumption, quality, safety and other
hard constraints and other channels to force steel enterprises to
actively reduce capacity, encourage steel enterprises merger and
reorganization, out of part of the capacity.
owever, the reform
of steel enterprises brings not only capacity reduction, but also a
series of chain reactions, such as employment, tax, debt and so on. This
means that overcapacity reduction cannot be achieved overnight. In the
future, it will be mainly carried out gradually and steadily.
At
present, China's steel overcapacity, mainly concentrated in the
construction of steel and other low-end steel, steel enterprises between
the uneven product quality. At the same time, high-quality special
steel still depends on imports to fill. Therefore, the future steel
enterprises can no longer keep the "old" life, in the capacity at the
same time, but also from technological innovation, improve product
quality, promote enterprise product upgrading, accelerate the high-end,
intelligent, green aspects of transformation and production.
So
can reform bring light to the depressed steel industry? Rome was not
built in a day, it is easy to say to capacity, and it is difficult to do
it. It is difficult to play a role in the decline of steel prices in
the short term.
Recent steel prices continue to refresh the new
record low, not only because of oversupply, industry capital chain
fracture, capital market slump, vicious competition between enterprises
are dragging down steel prices. Although the data shows that the current
pace of capacity reduction has accelerated, it is indeed in the initial
stage of 2016 to stop the fall of steel prices, it can be said that the
short-term effect has emerged, but the long-term need to see how the
"curative effect" really entered the implementation stage.
In
the future, we can not only focus on reducing capacity, but also
stimulate the growth of actual steel demand; Only when both supply and
demand are mobilized can the real purpose of reform be realized. Only
solve their own long-term structural contradictions, is the hope of the
industry out of trouble transformation.