2017 Has a Long Way to Reduce Capacity

The state council information office will held a press conference reference of leading .the economic development of the new normal and deepening the reform of the supply side ,  director of the national development and reform commission, said in 2017 the requirements  of reducing the production capacity will be higher, the pressure will be greater. As a  LSAW steel pipe, DSAW steel pipe, 3 PE anticorrosive coating pipe and other products  production services vendors, Shinestar group has been very attention to reducing  capacity. Shinestar steel research institute believes that have a long way to go to the  process of reducing production capacity, have pressure to just have power.

In 2016, during the process of reducing production capacity ,we encounter many new  problems and new situations, such as the contradiction between supply and demand, price  fluctuations,etc. Price is an important indicator of the baton role is very important for  the supply and demand.

At the beginning of 2016 ,steel price index is only about 60, in the second half of  2016,the price index rose to 100, the price also have a substantial rise. Line, rebar,  cold rolled sheet, plate steel, at the beginning of the year the price also is little  more than 2200 yuan per ton, 3800 yuan by the?end of the year. At the beginning of bohai  sea power coal prices index, 370 yuan per ton, in the second half once topped 680 yuan,  fluctuates up and down at the end of this year or in 600 yuan per ton.

Shinestar steel institute think about it, one is the inventory of the cover, because the  economic operation is smooth, enterprises need to cover the inventory; Second, active  reduce production, steel and coal enterprise according to the demand of production  capacity to compress the output; Third is the ultra falls, is the economic slowdown when  price down; Forth is policy expectations, everyone think efforts in increasing capacity,  may reduce the supply, prices are likely to pick up. But overall, the supply and demand  fundamentals have no fundamental change, price fluctuation is a comprehensive result of  short-term factors, it also can meet the demand of economic stability good, increasing  trend.

There are some more complex factors affecting price fluctuation, such as electricity,  road, rail capacity, etc. For this kind of situation, the national development and reform  commission together with relevant departments, trade associations, etc adopted measures:  the first is the orderly release efficient advanced capacity, increase production. The  second is to guide coal with coal enterprises signed a long-term agreement or contract,  change its way to trade, it also play a positive role. The third is the specification of  coal price index of compiling and publishing. The fourth is a specification of coal  distribution activity, strengthen the security of railway transportation.

Relevant departments are making 2017 plan of steel coal reducing production capacity,  sciencely making mission objectives. To further strengthen the safety standards and  backward production capacity standards, "zombie" companies must as a "key", speed up from  the closure.

China's steel industry should have deep understanding to the importance of capacity,  change thinking methods, deepen the reform of the supply side. As steel whole service in  the field of enterprise, Shinestar group will do a good job in the lead, to speed up the  transformation and upgrading, strive to produce high quality LSAW steel pipe, 3 PE  anticorrosive coating steel pipe, scaffolding plank and other products, for  the healthy and stable development of iron and steel industry efforts.