1. The primary control target shifts to ensure the steel structure market demand

 

Since the second half of last year, the continuous decline of various macroeconomic indicators has aroused the concern and concern of the decision-making departments. Statistics show that GDP has shown a quarter-to-quarter decline in the past year, and the cumulative growth rate in 2011 was 9.2%, down 1.2 percentage points from the previous year. Fixed asset investment and industrial added value also showed a significant decline. In 2011, the actual growth rate of fixed asset investment (excluding the price increase of investment products was only 16.1%, far lower than the previous growth rate of more than 20%; the industrial added value in December last year fell back to 12.8%. Even at the price level Falling down also implies signs of economic coldening. The PPI index in December last year and January this year rose by 1.7% and 0.7% respectively, among which steel prices have fallen. This industrial producer’s ex-factory price index The fall of the style also indicates that the previous tightening is too strong and the overall demand is weak.

 

What is particularly worrying is that the European debt crisis has been troublesome. In the worst case scenario, the disorderly default of some countries’ debts has triggered a major impact on the global financial system, which has plagued the world’s real economy and is bound to have a major impact on Chinese exports. Even if this bad situation is avoided, the developed countries in Europe and the United States will also tighten their spending because of the deficit reduction, which is not conducive to China's trade exports. Affected by this, China's export growth rate has narrowed rapidly since 2011, and even a negative growth of 0.5 in January this year. If the price increase factor is removed, the decline in exports will be even greater. From the HSBC China PMI index in February this year, the export order data fell to a new low in 8 months, indicating that the export prospects this year are not very optimistic.

 

It is in view of the above situation that in order to avoid the superposition of the domestic tightening effect and the deterioration of the external environment, there is a “hard landing” of the economy, so the decision-making department decides that the primary control target turns to steady growth, while taking into account the control of the price level. Recently, the Central Committee held a meeting to point out that this year we must combine stability, price control, structural adjustment, benefiting people's livelihood, grasping reform, and promoting harmony. Therefore, the steady growth has reached the top of the macro-control target.

 

Under the guidance of the primary control targets for stable growth, some substantial easing measures will be introduced one after another. Since December last year, the central bank has cut the deposit reserve ratio twice in a row, and it is expected that there will be several downward adjustments in the future. If China's export slowdown exceeds expectations, it will stimulate domestic demand with greater intensity, including stimulating the first set of self-housing needs and improving housing demand, and does not rule out the possibility of financial institutions cutting interest rates. In terms of stabilizing export demand, relevant departments are also studying and preparing to introduce policy measures, such as supporting financial and taxation policies, helping enterprises cope with trade frictions, and improving export credit risk protection mechanisms.

 

All of this will help the steel demand pick up and there will be no worst situation. It is estimated that the full-caliber demand for crude steel in 2012 (including direct exports will reach or approach 700 million tons, an increase of more than 3% over the previous year.

 

2. Increased consumer demand, driving steady growth in output

 

According to the statistics of the Express News, China's crude steel output in 2011 was 683 million tons, an increase of 8.9% over the previous year. It is estimated that the national crude steel output will reach 700 million tons in 2012, which will not be lower than 5% from the previous year.

 

The biggest uncertainty that hinders the steady growth of China's crude steel production at this stage is the sharp deterioration of the European debt crisis. If the world's major economies fail to cope, they will stand by and lead to a hard debt default in Greece, Italy and other countries, or a disorderly debt default, which will inevitably lead to a more serious recession in the world economy. Affected by this, the Chinese economy certainly cannot be immune to its own situation, and its economic "hard landing" situation is difficult to avoid, that is, the economic growth rate is less than 7%. Under this circumstance, China's crude steel output is likely to have a negative growth, and the annual crude steel output is less than 680 million tons.

 

From the current point of view, the momentum of the continued deterioration of the European debt crisis seems to have stopped, and the panic atmosphere caused by this has subsided, and the market is regaining confidence. Its main performance: First, the world's major economies have formed a consensus and take measures to avoid debt defaults in Greece, Italy and other countries. If it goes well, it will make the euro zone get rid of the collapse prospects. Second, the US economy began to stabilize. According to relevant information, although the current unemployment rate in the United States is still at 8.3%, it is the lowest level since February 2009. Since the beginning of this year, the US Dow has been rising, once breaking the historical high point of 13,000 points, just one step away. . Third, the global manufacturing industry generally rebounded. This is the most important "twilight". According to an authoritative survey, the purchasing managers' index for 30 countries in the world was 51.2 in January this year, an increase of 1 point from December last year. Among the 30 countries, the growth rate of US manufacturing has reached the highest level since June 2011; the growth of India's industrial sector has reached the highest level in history; the German manufacturing index is 51; although China's official PMI index has not increased much, It also rebounded to 50.5. Although HSBC's China's latest PMI index is still below 50, the chain has already rebounded and is much better than the previous pessimistic forecast. As the most important area of ​​construction steel structure consumption, the manufacturing industry is the first to pick up, which undoubtedly indicates that the overall market trend is turning to recovery.

 

It can be seen that although the European debt crisis has deteriorated severely, the risk of a more serious recession in the world economy still exists, but it is a small probability event. The main theme of the world economy this year is still continuing to recover.

 

The basic trend of the continued recovery of the world economy, coupled with the establishment and implementation of the primary regulatory targets for the steady growth of domestic decision-making institutions, has determined the steady growth of China's steel demand and its output, although its growth will continue to fall.

 

From 2005 to 2011, the average growth rate of China's crude steel production in the seven years was 13.1%. If China's economic situation is better than expected in 2012, the growth rate of crude steel is only 50% lower than the average growth rate of the previous seven years. Compared with the growth rate of 8.9% in 2011, it only fell by 2.4 percentage points, reaching a growth rate of 6.5%. Steel production will reach 728 million tons.

 

If China's crude steel output reached less than 700 million tons in 2012, and the growth rate is only the same as the previous year, or even negative growth, what would be the concept? That means that China's steel and related industries are in a recession; The composition of China's industrial added value, China's GDP growth rate fell sharply, that is, fell back below 5%. This will be an unbearable and drastic change.

 

If the national crude steel output in 2012 reaches 700 million tons, or higher, according to the calculation of crude steel production capacity of 850 million tons in the same period, China's crude steel capacity utilization rate will be above 80%, or even 85%, which is an internationally recognized normal level.