State-owned, privately-owned steel enterprises under cold spell China Economic News Network: Tangshan Iron and Steel sees Qian’an. With Qian’an, the largest open-air iron ore mine in Asia and the largest in Asia, it has been known as “Iron Qian’an†since ancient times. The steel and mining industry accounts for about 70% of Qian’an’s fiscal revenue, and steel accounts for over 60% of Qian’an’s total economic output.
On December 10, the reporter went to investigate and interview in Qian'an City. Surprisingly, there were rumours that the recovery of the Tangshan Iron and Steel Industry was picking up. However, many outstanding private steel companies, such as Jiujiang, located in Qian'an, are actually not willing to be interviewed by reporters. "The situation is not very good. We are busy finding out the road. We are not willing to say it." A person in charge of the Qiang'an Foreign Publicity Bureau explained.
At the time of the cold snap, different from the fact that many small and medium-sized steel companies closed down and shut down production, large-scale state-owned steel companies chose to operate with a heavy load.
On December 11, after the snow was clear, the reporter went to Hebei Shougang Qian'an Iron & Steel Co., Ltd. (hereinafter referred to as Shougang Qian'an Company). If the car has not yet entered the factory area, it will be seen that the white steamy steam will drift with the wind. Due to the heat generated by the plant's all-round operation, the remaining snow on the lawn is obviously much less than the roadside outside the factory. .
"Shougang Qian'an Company was profitable in the first eight months of this year. It began to lose money in September. The monthly loss in September and October was 50 million to 100 million yuan. The situation was slightly better in mid-November. The monthly two-month loss can be controlled within 50 million yuan per month. It is generally expected that the losses after September will be equal to the profits of the first eight months of this year. It is expected that the first quarter of next year will be a loss." Wu Ping, party secretary of Shougang Qian’an Company, told the China Economic Times.
According to Wu Ping, in the first half of the year, the steel prices that had been leaping along in the first half of the year, although they had shown a downward trend in August, none of the domestic steel companies expected the disaster to be so rapid. First, the price of steel products plummeted, while the price cuts for bulk materials such as coal and iron fines lag significantly behind those of steel products, causing iron and steel companies to be confused for a moment and do not know how to deal with them, thus choosing to stop production or reduce production. Then there was a panic selling in the market, and the downstream “reservoir†functions of distributors and end users quickly lost.
Taking the common carbon hot-rolled coils produced by the company as an example, the selling prices in May and June are still between 6000 and 7,000 yuan/ton. From late September to early October, they fell to 3,000 yuan/ton, down by nearly 60%. It is tragic. The prices of all steel products in the country are roughly the same. The profit from July was drastically declining, and there was a general loss in the steel industry in September and October.
How to deal with the crisis, "a side of hard internal strength, energy saving, one side active open source - across the original middle agents, direct dialogue with the end customer, so as to strive to expand more customers. In addition, Qianggang company also adjust the product structure, Increased the production and sales of high value-added products." In the face of the crisis, Wu Ping said. These strategies are similar to those reported by the reporter in Hebei Iron and Steel Group Tangshan Iron and Steel Co., Ltd. (hereinafter referred to as Tangshan Iron & Steel Co., Ltd.).
“That is, during the most difficult September and October of the entire industry, Tangshan Iron & Steel did not cut production or stop production. Instead, we chose to implement 14 measures, such as stabilizing the pace of production and accelerating the circulation of funds, so as to connect with the current market situation as soon as possible. So far, we have digested the high-priced raw material inventory that was purchased before the Olympics, controlled the pace of procurement according to the inventory volume of about 10 days, reduced the inventory capitalization by more than 2 billion yuan, and removed the burden. In 2009, no matter how the market changed We can all be 'light-loaded'.†On December 12th, Zheng Ge, director of the Tangshan Iron and Steel Company Information Office, said in an interview with reporters that his words contained a firm confidence.
According to Zheng Ge, for many steel companies in the early stages of the crisis, they even waited for the goods to be held for sale. Tang Gang chose the “no reduction in production, no pay reduction, no loss†path, that is, to ensure the smooth progress of daily production and sales. Maintain a healthy and orderly production and sales balance.
"My company's monthly production is 1 million tons, and we have maintained a reasonable inventory of about 50,000 tons, which is the output for two and a half days. From September, companies began to optimize their technical indicators, strengthen basic management, and strictly control the feeding. Accelerate the digesting of high-value inventory, change the business owner into a business, take the initiative to sign product manifests, establish a stake-making business partnership with customers, and form a profit community on the industry chain, thus ensuring profitability.†Zheng Ge said.
He said that the reason for choosing such a route was that the leader of Tangshan Iron and Steel Company had calculated such an account: Tangshan Iron and Steel Company is a large-scale enterprise with 40,000 employees, and a fixed monthly expenditure of 700 million will be needed. yuan. Cuts or shutdowns will result in the destruction of a well-built sales network and the breakdown of the capital chain, as well as the loss of talent and confidence. This is crucial for the survival and development of a company.
How should private small and medium-sized steel enterprises face the current economic downturn? Zheng Ge, director of the Information Office of Tangshan Iron and Steel Company, believes that compared with state-owned enterprises, private enterprises have many advantages such as low employee management pressure, low operating costs, and flexible management methods. However, during the crisis, they also show some weaknesses: weak credit guarantees. In the context of the global financial crisis, it is not easy to obtain loans, and thus it is most vulnerable to the maintenance of the capital chain. In addition, it is also more difficult to obtain bulk raw materials in the upper reaches, such as the traditionally used credit selling facilities of coal.
Tangshan has become a "stricken area"
Chengye Iron and Steel, but also the steel is defeated by steel, which accounted for 51% of Hebei Iron and Steel production of Tangshan, China's steel industry in 2008 became the "hard-hit area."
"Compared with other regions, the special location between Beijing, Tianjin, and Olympic Games cities has made the Tangshan Iron and Steel Industry even more 'injured'." Zheng Ge, director of the Information Office of Tangshan Iron and Steel Company, said bluntly.
In the first half of 2008, the prices of iron ore, coal and steel all soared. It also coincided with the pre-Olympics. Taking into account that the upcoming Olympic security may involve traffic control and transportation restrictions, many steel companies have to raise money and buy high-priced raw materials for at least two months. The Olympic Games have not yet ended. The national steel situation has turned sharply. The Tangshan Iron and Steel Company has no counterattack and has been caught in the cold by the industry.
However, the serious consequences of the crisis are inextricably linked to Tangshan Iron and Steel's own defects. The status quo of over-dispersed industries and private capital-based industries has caused Tangshan Iron and Steel Industry to “hate iron and steel,†and it has suffered heavy fighting and internal friction during the crisis.
The data from the Hebei Metallurgical Association shows that in 2007, the output of private steel enterprises increased by about 7 times in 2002, accounting for more than 70% of the province's total.
According to figures released by the Department of Industry Policy of the National Development and Reform Commission in early 2008, the national steel production in 2007 was 418.87 million tons. Tangshan Iron & Steel accounted for 10.5% of the country's total output. Except Tangshan Steel's output of 10 million tons, most of the rest were created by private enterprises. From this, it can be inferred that the output of steel produced by private enterprises in Tangshan alone is more than 30 million tons, accounting for about three-fourths of the production of steel in Tangshan City and accounting for 7% of the national steel production.
In addition, at the end of 2007, Tangshan City had promised to reduce private steel companies from more than 100 four years ago to 20. This figure is also sufficient to illustrate the public ownership of Tangshan private steel companies.
According to statistics from the Hebei Metallurgical Industry Association, in the worst case of the market in September and October this year, more than 50% of the steel mills in the Tangshan region were shut down, and the maximum production capacity at the time of shutdown reached 58% of the total steel production capacity of Tangshan City. Discontinued steel mills are almost all private enterprises.
Song Jijun, vice chairman of Hebei Metallurgical Association, expressed concern about the survival prospects of private steel companies in Hebei. He believes that Hebei's private steel enterprises are currently facing a lot of pressures: imbalances in supply and demand in the domestic market and excessive competition to squeeze prices, increase investment, increase in costs, private steel companies in Tangshan, Chongqing, a large number of clusters and scattered construction, It is directly facing the pressure of the declining supporting capacity of the local environmental protection, resources, energy and transportation.
How long does the complex production capacity last? As of late November, the shutdown capacity of the steel industry in Tangshan has been reduced from 58% of the original total production capacity to 34%, and more than 40% of the production capacity has been suspended. Since the steel mills that have stopped production are almost all private enterprises, the main force for the resumption of production is private steel enterprises.
Wu Ping, party secretary of Shougang Qian'an, believes that the reason for the market warming is that in addition to the country’s policy of expanding domestic demand and the positive measures taken by the Tangshan government, after more than two months of trials, most steel companies have realized the reality. Through active adjustment, it has its own countermeasures.
However, how long does it last for even a resumption of production?
A steel industry analyst in Tangshan shook his head and smiled. He believes that the current choice of resumption of production of private enterprises can be summarized as several reasons: First, the wait-and-see sentiment at the beginning of the third quarter when the market is still unclear, and the high cost of raw materials and steel products in the first half of the year could not bear the low price and led to a short delay. Finding a solution to the situation and adjusting measures to local conditions, and then resuming production; Secondly, the trial production due to increased confidence in the market recovery industry; Third, due to concerns about long production stoppages leading to equipment damage, loss of backbone technical staff, funds Passive resumption of production such as chain breakage. In addition, as the year approaches, some local governments require companies to reduce layoffs as much as possible, maintain social stability, and encourage recovery.
“The most fearful thing for companies is not to suspend production, but to stop for a while at a time. It will have a great negative impact on the service life of equipment and employees’ confidence. Even the best steel companies can’t stand a month. A furnace," said the person.
Meng Qingheng, an analyst at China Iron and Steel Industry Network, believes that the crisis is the result of the combination of the international financial crisis and the cyclical adjustment of the domestic steel industry. Given that the current government's rescue measures have not yet stopped the economic downturn, the overall economic situation in China next year is still not optimistic. The current mild fluctuations in steel prices may continue for some time. Therefore, if there are no major positives, especially the rapid recovery of downstream demand, the current iron and steel enterprises will still be underpowered to resume production.
The national development and reform conference convened on December 12th gave strong support to the nine pillar industries that include steel, automobiles, shipbuilding, and equipment manufacturing, and will launch a revitalization plan. This may be an example of an invigorator for the Tangshan Iron and Steel Industry that has just begun to recover steadily. .
On December 10, the reporter went to investigate and interview in Qian'an City. Surprisingly, there were rumours that the recovery of the Tangshan Iron and Steel Industry was picking up. However, many outstanding private steel companies, such as Jiujiang, located in Qian'an, are actually not willing to be interviewed by reporters. "The situation is not very good. We are busy finding out the road. We are not willing to say it." A person in charge of the Qiang'an Foreign Publicity Bureau explained.
At the time of the cold snap, different from the fact that many small and medium-sized steel companies closed down and shut down production, large-scale state-owned steel companies chose to operate with a heavy load.
On December 11, after the snow was clear, the reporter went to Hebei Shougang Qian'an Iron & Steel Co., Ltd. (hereinafter referred to as Shougang Qian'an Company). If the car has not yet entered the factory area, it will be seen that the white steamy steam will drift with the wind. Due to the heat generated by the plant's all-round operation, the remaining snow on the lawn is obviously much less than the roadside outside the factory. .
"Shougang Qian'an Company was profitable in the first eight months of this year. It began to lose money in September. The monthly loss in September and October was 50 million to 100 million yuan. The situation was slightly better in mid-November. The monthly two-month loss can be controlled within 50 million yuan per month. It is generally expected that the losses after September will be equal to the profits of the first eight months of this year. It is expected that the first quarter of next year will be a loss." Wu Ping, party secretary of Shougang Qian’an Company, told the China Economic Times.
According to Wu Ping, in the first half of the year, the steel prices that had been leaping along in the first half of the year, although they had shown a downward trend in August, none of the domestic steel companies expected the disaster to be so rapid. First, the price of steel products plummeted, while the price cuts for bulk materials such as coal and iron fines lag significantly behind those of steel products, causing iron and steel companies to be confused for a moment and do not know how to deal with them, thus choosing to stop production or reduce production. Then there was a panic selling in the market, and the downstream “reservoir†functions of distributors and end users quickly lost.
Taking the common carbon hot-rolled coils produced by the company as an example, the selling prices in May and June are still between 6000 and 7,000 yuan/ton. From late September to early October, they fell to 3,000 yuan/ton, down by nearly 60%. It is tragic. The prices of all steel products in the country are roughly the same. The profit from July was drastically declining, and there was a general loss in the steel industry in September and October.
How to deal with the crisis, "a side of hard internal strength, energy saving, one side active open source - across the original middle agents, direct dialogue with the end customer, so as to strive to expand more customers. In addition, Qianggang company also adjust the product structure, Increased the production and sales of high value-added products." In the face of the crisis, Wu Ping said. These strategies are similar to those reported by the reporter in Hebei Iron and Steel Group Tangshan Iron and Steel Co., Ltd. (hereinafter referred to as Tangshan Iron & Steel Co., Ltd.).
“That is, during the most difficult September and October of the entire industry, Tangshan Iron & Steel did not cut production or stop production. Instead, we chose to implement 14 measures, such as stabilizing the pace of production and accelerating the circulation of funds, so as to connect with the current market situation as soon as possible. So far, we have digested the high-priced raw material inventory that was purchased before the Olympics, controlled the pace of procurement according to the inventory volume of about 10 days, reduced the inventory capitalization by more than 2 billion yuan, and removed the burden. In 2009, no matter how the market changed We can all be 'light-loaded'.†On December 12th, Zheng Ge, director of the Tangshan Iron and Steel Company Information Office, said in an interview with reporters that his words contained a firm confidence.
According to Zheng Ge, for many steel companies in the early stages of the crisis, they even waited for the goods to be held for sale. Tang Gang chose the “no reduction in production, no pay reduction, no loss†path, that is, to ensure the smooth progress of daily production and sales. Maintain a healthy and orderly production and sales balance.
"My company's monthly production is 1 million tons, and we have maintained a reasonable inventory of about 50,000 tons, which is the output for two and a half days. From September, companies began to optimize their technical indicators, strengthen basic management, and strictly control the feeding. Accelerate the digesting of high-value inventory, change the business owner into a business, take the initiative to sign product manifests, establish a stake-making business partnership with customers, and form a profit community on the industry chain, thus ensuring profitability.†Zheng Ge said.
He said that the reason for choosing such a route was that the leader of Tangshan Iron and Steel Company had calculated such an account: Tangshan Iron and Steel Company is a large-scale enterprise with 40,000 employees, and a fixed monthly expenditure of 700 million will be needed. yuan. Cuts or shutdowns will result in the destruction of a well-built sales network and the breakdown of the capital chain, as well as the loss of talent and confidence. This is crucial for the survival and development of a company.
How should private small and medium-sized steel enterprises face the current economic downturn? Zheng Ge, director of the Information Office of Tangshan Iron and Steel Company, believes that compared with state-owned enterprises, private enterprises have many advantages such as low employee management pressure, low operating costs, and flexible management methods. However, during the crisis, they also show some weaknesses: weak credit guarantees. In the context of the global financial crisis, it is not easy to obtain loans, and thus it is most vulnerable to the maintenance of the capital chain. In addition, it is also more difficult to obtain bulk raw materials in the upper reaches, such as the traditionally used credit selling facilities of coal.
Tangshan has become a "stricken area"
Chengye Iron and Steel, but also the steel is defeated by steel, which accounted for 51% of Hebei Iron and Steel production of Tangshan, China's steel industry in 2008 became the "hard-hit area."
"Compared with other regions, the special location between Beijing, Tianjin, and Olympic Games cities has made the Tangshan Iron and Steel Industry even more 'injured'." Zheng Ge, director of the Information Office of Tangshan Iron and Steel Company, said bluntly.
In the first half of 2008, the prices of iron ore, coal and steel all soared. It also coincided with the pre-Olympics. Taking into account that the upcoming Olympic security may involve traffic control and transportation restrictions, many steel companies have to raise money and buy high-priced raw materials for at least two months. The Olympic Games have not yet ended. The national steel situation has turned sharply. The Tangshan Iron and Steel Company has no counterattack and has been caught in the cold by the industry.
However, the serious consequences of the crisis are inextricably linked to Tangshan Iron and Steel's own defects. The status quo of over-dispersed industries and private capital-based industries has caused Tangshan Iron and Steel Industry to “hate iron and steel,†and it has suffered heavy fighting and internal friction during the crisis.
The data from the Hebei Metallurgical Association shows that in 2007, the output of private steel enterprises increased by about 7 times in 2002, accounting for more than 70% of the province's total.
According to figures released by the Department of Industry Policy of the National Development and Reform Commission in early 2008, the national steel production in 2007 was 418.87 million tons. Tangshan Iron & Steel accounted for 10.5% of the country's total output. Except Tangshan Steel's output of 10 million tons, most of the rest were created by private enterprises. From this, it can be inferred that the output of steel produced by private enterprises in Tangshan alone is more than 30 million tons, accounting for about three-fourths of the production of steel in Tangshan City and accounting for 7% of the national steel production.
In addition, at the end of 2007, Tangshan City had promised to reduce private steel companies from more than 100 four years ago to 20. This figure is also sufficient to illustrate the public ownership of Tangshan private steel companies.
According to statistics from the Hebei Metallurgical Industry Association, in the worst case of the market in September and October this year, more than 50% of the steel mills in the Tangshan region were shut down, and the maximum production capacity at the time of shutdown reached 58% of the total steel production capacity of Tangshan City. Discontinued steel mills are almost all private enterprises.
Song Jijun, vice chairman of Hebei Metallurgical Association, expressed concern about the survival prospects of private steel companies in Hebei. He believes that Hebei's private steel enterprises are currently facing a lot of pressures: imbalances in supply and demand in the domestic market and excessive competition to squeeze prices, increase investment, increase in costs, private steel companies in Tangshan, Chongqing, a large number of clusters and scattered construction, It is directly facing the pressure of the declining supporting capacity of the local environmental protection, resources, energy and transportation.
How long does the complex production capacity last? As of late November, the shutdown capacity of the steel industry in Tangshan has been reduced from 58% of the original total production capacity to 34%, and more than 40% of the production capacity has been suspended. Since the steel mills that have stopped production are almost all private enterprises, the main force for the resumption of production is private steel enterprises.
Wu Ping, party secretary of Shougang Qian'an, believes that the reason for the market warming is that in addition to the country’s policy of expanding domestic demand and the positive measures taken by the Tangshan government, after more than two months of trials, most steel companies have realized the reality. Through active adjustment, it has its own countermeasures.
However, how long does it last for even a resumption of production?
A steel industry analyst in Tangshan shook his head and smiled. He believes that the current choice of resumption of production of private enterprises can be summarized as several reasons: First, the wait-and-see sentiment at the beginning of the third quarter when the market is still unclear, and the high cost of raw materials and steel products in the first half of the year could not bear the low price and led to a short delay. Finding a solution to the situation and adjusting measures to local conditions, and then resuming production; Secondly, the trial production due to increased confidence in the market recovery industry; Third, due to concerns about long production stoppages leading to equipment damage, loss of backbone technical staff, funds Passive resumption of production such as chain breakage. In addition, as the year approaches, some local governments require companies to reduce layoffs as much as possible, maintain social stability, and encourage recovery.
“The most fearful thing for companies is not to suspend production, but to stop for a while at a time. It will have a great negative impact on the service life of equipment and employees’ confidence. Even the best steel companies can’t stand a month. A furnace," said the person.
Meng Qingheng, an analyst at China Iron and Steel Industry Network, believes that the crisis is the result of the combination of the international financial crisis and the cyclical adjustment of the domestic steel industry. Given that the current government's rescue measures have not yet stopped the economic downturn, the overall economic situation in China next year is still not optimistic. The current mild fluctuations in steel prices may continue for some time. Therefore, if there are no major positives, especially the rapid recovery of downstream demand, the current iron and steel enterprises will still be underpowered to resume production.
The national development and reform conference convened on December 12th gave strong support to the nine pillar industries that include steel, automobiles, shipbuilding, and equipment manufacturing, and will launch a revitalization plan. This may be an example of an invigorator for the Tangshan Iron and Steel Industry that has just begun to recover steadily. .
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