On March 30, Premier Wen Jiabao of the State Council presided over the State Council executive meeting, stressing that it should further improve the macro-control of the development of the steel industry and adopt more direct and more effective measures to cope with the problem of sharp rise in international iron ore prices.
Xu Zhongbo, a professor at the School of Metallurgy at Beijing University of Science and Technology and an expert on international issues in the iron and steel industry, pointed out that the three measures proposed by Premier Wen to cope with the sharp rise in international iron ore prices reflect that the government has truly used economic means to scientifically develop China’s economic development. Macroeconomic regulation and control, on the other hand, is also a continuation of the macroeconomic regulation and control measures of the State Council on controlling fixed asset investment last year.
International sellers took the opportunity to raise prices, domestic steel mills competed in disorder, and soaring iron ore prices attracted the government to attack.
"big background"
Iron ore prices soared, business disorder
In recent years, the international steel industry has recovered, iron ore is in short supply in the world, and prices are soaring. The countries in which China mainly relies on imports are India, Australia and Brazil. Since April 1 this year, the international contract price increase of iron ore has finally been determined to be 71.5%. Subsequently, South Korea’s Posco and China’s Baosteel Group have also been forced to accept this increase, which has caused domestic steel producers to face enormous cost pressures. The phenomenon of raising prices has also intensified.
Xu Zhongbo pointed out that China's trouble lies in the large-scale purchase of high-priced iron ore to produce low-grade and low-priced steel products. Not only did it cost a lot of money, but it also caused the port to be tight, affecting transportation and polluting the environment. It is really worth the loss.
Since March 1st, China has begun to implement automatic import license management, hoping to strengthen iron ore import management. This measure has not only failed to inhibit iron ore imports, but has greatly stimulated the speculative impulse of domestic traders.
"Heavy fist to deal with one"
Stop 6 kinds of primary steel export tax rebates
The executive meeting of the State Council proposed to cancel the export tax rebate measures for steel billets and steel ingots as soon as possible. Xu Zhongbo pointed out that the government's cancellation of export tax rebate measures is for crude steel products such as steel billets and steel ingots. The users who produce these steel primary products are small enterprises with high energy consumption, high pollution and facing elimination. These enterprises use the government to encourage exports. The export tax rebate policy was formulated to import iron ore to produce crude steel to obtain meager profits.
Recently, the Ministry of Finance and the State Administration of Taxation have issued a notice to stop the implementation of the tax rebate policy for steel primary products such as steel billets from April 1, 2005. The export product tax numbers are 7203, 7205, 7206, 7207, 7218, 7224. The regulations shall be implemented as of April 1, 2005, and the specific implementation time shall be based on the export date indicated by the Customs on the Export Goods Declaration Form (Export Tax Refund).
At present, the export tax rebates for steel billets and long products are both 13%. According to the forecast, due to the adjustment of export tax rebates for the two major categories of products, the profit of China's steel mills will be reduced by 7% in 2005, amounting to 7 billion yuan. Xu Zhongbo pointed out that according to the ratio of 13%, plus the tax rebate of 300 yuan to 500 yuan per ton of billet exported, the current profit per ton of billet exported by steel mills is only about 100 yuan. This export tax rebate policy is unfavorable to the country. And steel mills only earn a meager price difference through taxation, and now the iron ore price increase is too high, China's iron ore supply is quite tight, and if the steel billet as a primary product is exported in large quantities, it will make iron ore. The contradiction between supply and demand of stone is more prominent.
The government has canceled the export tax rebate measures for crude steel. Some low-end steel producers will naturally stop production. The government will implement macroeconomic regulation and control through taxation, so that the contradiction between iron ore supply and demand will be adjusted in the market. Xu Zhongbo believes that this measure will have an immediate effect on alleviating the tight supply and demand of iron ore and high prices.
"Heavy fist to deal with two"
Import license system will be implemented from May 1
According to the "Oriental Morning Post" report, due to the intensified price of iron ore, the country has to screen the importers. The relevant departments have recently decided to implement the iron ore import licensing system from May 1 this year to limit iron. Mineral sand imports. According to the new regulations, only those enterprises with iron ore imports exceeding 300,000 tons in 2004 or imports exceeding 100,000 tons in the first two months of this year are entitled to iron ore import qualifications, and these enterprises that are eligible for import may not Iron ore is resold to companies that do not have import licenses.
A member of the Board of Directors of Shougang Co., Ltd. told reporters that the government's implementation of the iron ore import license system refers to the specific measures to strengthen the coordination and management of iron ore imports, and to rectify and regulate the iron ore business order. China imports iron ore world. First, but the power of negotiating power is weak, mainly because the import quotas that China has implemented before can be obtained by steel mills. It is easy to confuse market prices. The iron ore import license system is conducive to regulating iron ore imports. Standardize small steel mills.
Xu Zhongbo believes that strengthening the iron ore import coordination and management, rectifying and regulating the iron ore business order and increasing the structural adjustment of the steel industry, and restraining the blind expansion of steel production capacity are relatively empty, and the implementation is also more laborious because the government There are still problems in the system: “there are policies and countermeasuresâ€. The main reason for the high price of iron ore and the tight supply and demand is that some large steel mills are being lifted up. The government’s use of tax leverage is actually more in governance. Some small steel mills, but the real need to rectify the iron ore market will also test the ability of the National Development and Reform Commission.
“Steel Enterprise Evaluationâ€
The key is to re-integrate the steel industry
"As the second-largest iron and steel enterprise in China, the Shougang Group, which imports iron ore from overseas for more than 10 million tons per year, will not be caused by the implementation of the iron ore import license system from May 1. Any impact." Wu Bin, manager of the trade import and export company of China Shougang Group International Trade Engineering Co., told reporters.
The annual import of iron ore from Shougang Group accounts for 60% of the total iron ore purchased. The main import countries are Australia, Brazil, Peru and other countries. He pointed out that because Shougang Group used to purchase iron ore directly from foreign countries (such as Brazil CVRD, Australia RIOTINTO, BHP) and did not pass traders, the policy introduced this time will not affect Shougang Group. To a certain extent, it is still beneficial to Shougang because it can guarantee the supply of iron ore of Shougang Group and reduce the intermediate links of iron ore imports, so that traders who raise the price of iron ore cannot The price of iron ore can be reduced, which will reduce the operating costs of Shougang.
Wu Bin also analyzed that domestic steel mills vary in size and strength, and in order to compete for iron ore resources, they can only adopt disorderly competition and raise prices.
Regarding the imminent iron ore import licensing system, Wu Bin believes that its role will not be obvious, and if it is effective, it is only temporary. The most fundamental thing is to re-integrate the steel industry and expand and strengthen five or six large steel companies. When steel companies become bigger, they can bypass traders to import iron ore directly from foreign mines, and they can increase the steel company's right to speak in iron ore negotiations.
A member of the Board of Directors of Shougang Co., Ltd. told reporters that the government's response to the price increase of iron ore is fundamentally a major adjustment to the structure of the steel industry. First, the export tax rebate for crude steel such as steel billets and steel ingots will be cancelled. The government no longer encourages the export of primary steel products. This adjustment is very timely. The introduction of China's steel export tax rebate policy is based on the overcapacity of China's steel industry at that time, and the domestic demand is small. It also solves part of the employment problem. It is obviously untimely for China to continue to encourage high-priced imported iron ore to be processed into low-value-added crude steel low-priced exports. The source pointed out that the government's macro-control of the steel industry through taxation means hitting high-energy small steel mills and promoting resource utilization.
expert's point
Inhibition of iron ore imports is intended to regulate real estate
"The recent macro-control is more subtle." In this regard, Anjun chief analyst He Jun told reporters that the central government may worry about the investment rebound based on the current data. From the past State Council meeting, the Prime Minister’s attention to an industry is rare. At the same time, the current price increase from abroad has put pressure on domestic price increases. The central government has curbed overheating by suppressing overheating of steel. It is reported that Chinese steel companies have reluctantly accepted the fact that Asian iron ore prices have risen by 71.5% since April. At present, this price increase pressure is rapidly spreading, and domestic small and medium-sized steel enterprises are more affected.
Zhu Baoliang, chief analyst of the Macro Department of the National Information Center, told reporters that the State Council has adopted this measure to restrict domestic steel exports, which can reduce the import of iron ore into the international market. The current 71.5% is only a benchmark price in various steel plants. In the case of individual politics, it may lead to several further increases.
Brokerage point of view
Iron and steel enterprises are uneven
United Securities analysts believe that the 71.5% increase in iron ore exceeds market expectations, but it is a reality that steel companies have to accept. Considering the impact of iron ore price increases on costs and the price of steel, the profits of large steel companies such as Wuhan Iron and Steel, Baosteel and Anshan Iron and Steel will not be reduced. The ordinary steel produced by small and medium-sized enterprises, the price increase of this ore will further intensify the industry's profit differentiation, and small enterprises will encounter difficulties.
Steel price increase extension effect
Real estate industry costs rise
As far as the real estate market is concerned, the rise in steel prices has directly affected the increase in construction costs of developers.
Du Meng, president of Beijing International Development Co., Ltd. told reporters that steel as the main raw material for real estate construction, such a large price increase will inevitably lead to a chain reaction, and real estate will be more touched in the next two years. Commercial housing is generally divided into brick-concrete structure and frame structure. The amount of steel used for brick-concrete structure is small. Generally, the amount of steel used per square meter is about 30 kg. However, the amount of steel used for frame structure is relatively large. 40 kg to several hundred kg, affected by the price of steel.
Du Meng said that the price of steel in 2004 doubled from the price increase in 2003. It is estimated that the price increase of the office building will cost an average of 400 yuan per square meter of office building. According to this calculation, the iron ore price increase will continue to reduce the profit margin of developers.
Pan Shiyi, chairman and co-president of SOHO China Ltd., also said that the impact of large-scale construction projects such as office buildings will be more prominent. Pan told reporters that the CCTV new building with a building area of ​​more than 400,000 square meters requires steel 16 in total. Ten thousand tons, an average of more than 400 kilograms of steel per square meter. In other words, the increase in steel per kilogram of steel means that the project cost of CCTV's new site may cost an additional 160 million yuan.
According to Pan Shiyi, the sharp price increase of steel in early 2004 also directly suppressed the profit margin of Jianwai SOHO. He said that although the Jianwai SOHO project had already signed a contract with the construction unit before the steel price increase last year, nearly 50% of the steel price increase made the construction unit unable to operate at the original price. After the joint consultation, the construction unit It is responsible for 25% of the increase in steel, and the remaining 75% is borne by the developer.
Pan Shiyi revealed that the amount of steel used per square meter of Jianwai SOHO is 110 kilograms. This alone, the investment cost has increased by more than 5 million yuan.
Liu Xiaoguang, Chairman of the Board of Directors of Capital Land, told reporters that the supply and demand relationship in the market is a direct cause of housing prices. The relevant policies of the state are conducive to the positive development of the housing industry.
Li Wenjie, general manager of Zhongyuan Real Estate Group's North China region, believes that steel is an important element of the entire real estate industry. At the same time as the construction cost increases, the state will adopt regulatory measures on the housing price policy, which will reduce the developer's profit margin to a certain extent. Some developers may reduce costs in other aspects to maintain balance, which leads to other contradictions. Therefore, at this stage, the state needs to introduce a series of corresponding policies to cushion the impact on the real estate industry due to the rising price of building materials.
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