Double control of capacity

In the face of environmental and resource constraints, how should we achieve a fair and reasonable implementation of output reduction policy, so as to achieve “production reduction without loss of effect”? Shi Hongwei, deputy secretary-general of CSTEA, said that at present, the direction of the steel industry policy is correct and the actual effect is good. Two premises: first, the demand for steel products like welded steel pipe is lack of price elasticity, that is, the demand is rigid, and the impact of price rise and price reduction on consumption is not too large; Second, the supply elasticity of steel products is very large. Based on April’s daily production of 3.26 million tons of steel, the annual steel production is 1.19 billion tons; Based on the daily steel production of about 2.46 million tons in September, the annual steel production was 900 million tons, a difference of nearly 300 million tons. Under these two premises, in order to realize the adaptation of supply and demand, build a new pattern of “demand traction supply, supply to create new demand”, the steel industry this year implemented the “double control”.

In terms of “reducing production without reducing effect”, Shi Hongwei believes that the key is still to achieve the adaptation of supply and demand, especially the dynamic adaptation, in order to maintain stable pre galvanized steel pipe price, so that enterprise profits remain stable. Data show that the country’s production policy has been effective, January to September this year crude steel production growth fell 2.5 percentage points compared with the same period last year, while steel exports increased by 31.3%. Output growth is declining, while exports are increasing. Is there a shortage of domestic steel demand? In terms of steel prices, the average daily production of crude steel in April was about 3.26 million tons, which has dropped to nearly 2.46 million tons in September. At the same time that output is falling, demand of round steel tube for sale is also falling.

Supply and demand are in line. In particular, with the promotion and implementation of the national work of ensuring supply and stabilizing prices, coal and coke prices also began to decline. It can be seen that the state’s policy regulation is very in place, which plays a very large role in maintaining the healthy development of the industrial chain and supply chain. The supply and demand of China hollow section will basically maintain a dynamic balance and will not fluctuate greatly.