Boiler parts prices do not have the conditions for continuous rise

As my country's economic development enters a new normal, steel demand is basically saturated. Although this year's demand has stopped falling and rebounding, the main contributing industry is real estate. The driving force is not as good as before. Moreover, the adjustment of real estate in the later period will inevitably drag down steel demand again. From a medium to long-term perspective, steel demand is showing a downward trend. In addition, crude steel production capacity is still severely surplus, and the capacity utilization rate is less than 70%, which is far below the normal level. Steel production capacity is not a regional or structural surplus, but an absolute surplus. This is the most prominent problem in the industry.

De-capacity is a long-term and complex system engineering. Although the steel industry has completed 45 million tons of capacity reduction tasks ahead of schedule this year, the main exits are backward production capacity and long-term idle production capacity, with little work resistance and smooth progress. Overcapacity reduction in the next year will enter a critical stage: the closure of compliant production capacity and the withdrawal of zombie companies will cause local governments and companies to face a series of problems such as economic growth, debt handling, and employee placement. What is particularly worrying is that with the rebound of profitability, local governments and enterprises are less motivated to reduce production capacity, and some production capacity that has been discontinued at a loss has resumed production, and even outdated production capacity such as local steel has come back, further aggravating the pressure of oversupply, and the whole industry is losing money again. The alarm of the situation has not been lifted.

We should be soberly aware that in the case of stagnant steel demand and severe overcapacity, the price of boiler parts does not have the conditions to continue to rise, and the profitability of the steel industry is difficult to continuously improve, and there may even be relapses. At present, we should seize the favorable opportunity, unswervingly advance the supply-side structural reform, make more efforts, bear more pains, in order to achieve the goal of transformation and upgrading, green development, and finally realize the historical leap of the steel industry from large to strong .