Baosteel lowered its future production capacity target The end of the “Great Leap Forward” era of the steel industry?

On June 29th, China Steel Leading Baosteel Group Corporation published its 2010-2015 development plan, and plans to produce 50 million tons of crude steel production capacity in 2012 and more than 66 million tons in 2015. Baosteel's latest capacity targets are much lower than the previous strategic planning capacity.

Baosteel lowered its target
In 2007, Baosteel Group stated that it will form a production capacity of 80 million tons by 2012, with sales revenue of more than 50 billion US dollars and a total profit of more than 5 billion US dollars.

For the change in production capacity, Xu Lejiang, chairman of Baosteel Group, said that the reason for adjusting the capacity planning goal is that after the international financial crisis, Baosteel is more calm and cautious, and must act according to economic laws.

Baosteel said that during the new round of planning period, the internal and external situation is still complicated, the recovery process of the world economy is rugged, and the structural transformation of China's economic structure and development mode will bring about greater uncertainty; Under the background of increased homogenization competition, high resource costs and rising trade protectionism, China's steel industry will enter a low-speed development stage that is compatible with the low-profit era.

Expansion or will continue
"China's steel industry will have a period of expansion." He Rongliang, a steel analyst at the China Merchants Productivity Promotion Center, said that Baosteel has lowered its production capacity. On the one hand, industry profits have fallen, and the steel industry will be more difficult in the second half of this year. On the other hand, there are also problems in the development of the domestic steel industry. The adjustment of Baosteel is also an adjustment to the domestic steel environment, and it judges that it cannot complete the restructuring target. Although domestic policies have been advancing industry restructuring, there are few breakthrough cross-regional restructurings, and this is the way Baosteel relies on expansion. He Rongliang pointed out that from the perspective of an industrial development track, China's steel industry is still in an expansion period; and as industrial development enters a saturation period, the expansion of individual enterprises will not stop. In a highly mature market, there will be giant companies. "In the future, China's steel industry will be born like this."

Re-planning the steel road
Not long ago, the new Angang Group also issued a new plan, planning "four transformations": in terms of growth mode, from investment in new construction to investment in new construction and mergers and reorganizations and transformation; in the industrial layout, from inland development to coastal development And the transformation of international business; in the independent innovation, from the "follower" of the core technology to the "leader"; in the external output, from the single product output to the technical output and management output.

Baosteel and Angang have changed their previous development strategies and fully demonstrated that China's steel industry has reached a new crossroads.

On June 22, the Ministry of Finance announced the cancellation of the export tax rebate for some "two high" steel products. On June 17, the General Office of the State Council issued "Several Opinions on Further Strengthening Energy Saving and Emission Reduction to Accelerate Structural Adjustment of the Steel Industry" It is clearly stated that "except for projects approved by the state to carry out preliminary work, no steel projects with expanded production capacity will be approved or filed before the end of 2011."

On June 29, the main source contract of steel source was 4,092 yuan/ton, down 81 yuan, and the thread was 3,895 yuan/ton, down 84 yuan. The steel price continued to fall. Affected by the market's slump, steel stocks led by WISCO and Baosteel fell to their lowest point this year. Both the domestic market environment and the country's macro-control factors, as well as the iron ore giant's key points and the international economic environment, are forcing profound changes in China's steel industry.

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