The Macroeconomic Situation Is Not Optimistic, China Steel Industry Fall Into Trouble

Since July, the steel market is still in a difficult situation

. Report thanks that not only because of the downturn in market demand, but also due to various steel companies remained large-scale production. China's crude steel produces 1.93 million tons per day in mid-August, which close to past level of up to 200 tons. From the start of July, in order to reduce inventory, Baoshan Iron and Steel Group for three consecutive months will reduce steel prices.

Falling steel prices causes grim situation for various corporate earnings. The steel industry group, China Iron and Steel Industry Association vice president, said in a recent forum, from January to July this year, China's iron and steel enterprises profit is only 1.68 yuan per ton. Since the beginning of this year, China's steel industry has been falling to trouble. Mainly to weak demand, prices have fallen sharply and decline in the level of profits. August 29, the the Shanghai rebar contract price fell below 2,400 yuan mark integer, declined more than two percent lower than year-earlier levels; The first half of the year, the steel industry realized a total profit fell 49.4%.

China's iron and steel industry has a very close relationship with the macroeconomic conditions. The plight of the steel industry from one side reflects the downturn in the economic development. According to statistics, in July, the year-on-year growth rate of the gross national exports sharply from 11.3% in June, shrunk to 1%, nearly 20 percentage points lower than the level of the same period last year. The major export markets, China's exports to Europe in July, down 16% year-on-year, exports to Japan fell by 1%. U.S. export growth declined sharply from 10.6% in June to 0.6%, just one step away from the negative growth. Export suffered "frozen" directly drag on industrial production. In July, the national industrial added value increased by only 9.2% year-on-year to hit the lowest since May 2009.

At the same time, the growth rate of investment in fixed assets also has declined. New construction area of the national housing fells 9.8% in the first seven months, residential new construction area decreased 13.4%. According to the main economic data in July estimated that the GDP growth may have "broken 7." Because constitute economic indicators of GDP, exports and housing investment accounted for 3 percent of the total. Affected by decrease of two major indicators of growth or even negative growth, macroeconomic downward pressure is bound to greatly increase.

by: loveboa

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