Many steel industry support policies are expected to be introduced

In the first half of this year, large and medium-sized steel enterprises made a profit of 7.48 billion yuan, a year-on-year increase of 4.276 billion yuan, but the main business still suffered a loss of 660 million yuan, which has been losing for 11 quarters. In the face of this report card, Zhang Changfu, deputy chairman and secretary-general of China Iron and Steel Association, said that the steel industry should take the initiative to adapt to the new normal and new changes.

The reporter learned from the second information conference held in 2014 by the China Iron and Steel Association (CISA) that in the first half of the year, the high level of investment in fixed assets slowed down, especially since the area of ​​new real estate starts fell by a large margin of 16.4% year-on-year. It is difficult for consumption to increase significantly. In the first half of the year, the apparent consumption of crude steel in the country increased by only 0.4% year-on-year. At the same time, in terms of exports, despite the recovery of the overseas economy, in the first half of the year, exports of steel and iron products only increased by 1.2% year-on-year, due to the 1.6% year-on-year decrease in exports of mechanical and electrical products that consumed large amounts of steel.

Although the main business suffered losses for 11 quarters, the steel industry is not entirely bad news. At least, the economic benefits of the industry started to improve. Data show that in the first half of the year, large and medium-sized steel companies realized sales of 1,813.054 billion yuan, an increase of 1.12% year-on-year; realized profits and taxes of 45.414 billion yuan, an increase of 11.62%; and profits of 7.48 billion yuan, an increase of 4.276 billion yuan. The accumulated loss was 28.41%, a year-on-year decrease of 7.95 percentage points; the sales margin was 0.41%, an increase of 0.23 percentage points year-on-year.

In addition, the decline in industrial fixed asset investment is also considered a good year. In the first half of the year, the fixed assets investment of the iron and steel industry decreased by 7.08% year-on-year, making it the industry with the largest drop in investment among 56 sub-branches across the country. The decline in investment will inhibit the increase in production capacity in the next two to three years.

In view of the fact that the industry is still in a predicament, Zhang Changfu revealed at the press conference that steel companies are studying mixed ownership reforms. In the next step, the State Council may have to issue a document to deepen the reform of state-owned enterprises. The policy of SOEs to solve the social historical burden is also being formulated. The timing of mature state-owned enterprises in the steel industry will also advance. The China Iron and Steel Association is cooperating with the taxation and taxation departments to conduct investigations and studies on some major fiscal and taxation policy issues. Taxation policies such as export tax refunds, resource taxation, and ad valorem collection are being studied.