In 2012, domestic steel companies still have large liquidity requirements

As of August 7, domestic steel companies have raised 93.76 billion yuan through the issuance of vouchers, bills, and corporate bonds, which are mainly used to supplement working capital, purchase raw materials, and repay bank loans. Among them, short-term bonds were issued at RMB32.94 billion, medium-term notes at RMB19.5 billion, corporate bonds at RMB17.63 billion, and non-public offerings at RMB14.02 billion.

In recent years, the profitability of the steel industry has continued to decline, increasing the pressure on corporate funds. As of August 1, 2011, domestic steel enterprises raised 90.1 billion yuan in total funds, an increase of 45.3 billion yuan over the same period of last year (as of August 2). This year, the scale of funds raised by domestic steel companies is still huge, indicating that companies have greater demand for liquidity.

According to the data, in the first half of the year, the accumulated profits of steel companies in the China Steel Association were only 2.385 billion yuan, a substantial decrease of 54.549 billion yuan year-on-year. However, the fixed-asset investment growth in the steel industry has declined. In the first half of the year, the accumulated investment in fixed assets of the steel industry was 291.1 billion yuan, a year-on-year increase of 12.05%, and the growth rate was down 4.8 percentage points year-on-year. It is worth noting that overcapacity black smelting and rolling investment was 228.1 billion yuan, a year-on-year decrease of 5.4 percentage points; ferrous metal mining investment was 63 billion yuan, a year-on-year increase of 4.2 percentage points.

The dilemma that the domestic steel industry has fallen into the margin of profit or loss is mainly due to the weak demand of the downstream steel industry. The expansion of steel production capacity continues to intensify the contradiction between supply and demand, resulting in the continuous decline in steel prices, and the external iron ore of China. With a dependence of more than 60%, iron ore prices are always at a high level, eroding the profits of domestic steel companies.

Recently, the decline in domestic steel market prices has slowed down, and long products prices have shown signs of stabilization. From August 7th to the present, the price of integrated long steel products for steel nets has been fluctuating slightly at around 3,790 yuan/ton, while flat steel prices remain weak. Down. In July, the industrial added value increased by 9.2% year-on-year, 0.3 percentage points lower than that in June, indicating that domestic economic growth is still weak. The Politburo meeting held at the end of July stated that the economic work in the second half of the year should place steady growth in a more important position, with the aim of expanding domestic demand as a strategic base and solid economy as the basis for the development of the real economy. It is expected that the Chinese economy will continue to maintain a moderate steady growth in the second half of the year, and the profitability of the steel industry will improve, but the situation of meager profits will be difficult to reverse.