Japanese steel can not get rid of the shadow of china

"Japanese economic news" reported on March, 31, most of the domestic steel manufacturers have entered the full load operation. As a result of the deterioration of the steel market in China to expand domestic demand, China's exports to Asia to reduce Japan's steel ushered in the East wind. On the one hand, Japan's domestic demand is also very strong. However, due to the price has not been fully raised, the profitability of iron and steel enterprises is still at a low level. At the same time, the risk has not been eliminated. If China's domestic demand is weak, it is possible for the steel to return to the world. The global spread of trade protectionism will also affect the direction of the steel market.

In the face of the Gulf of Tokyo NSSC kimitsu steel plant, known as the "roll steel coil" Everfount to be shipped out. Since the fall of 2016, the production rate of blast furnace production of crude steel is increasing. Vice President Rong NSSC Minzhi said, in addition to some varieties, processing process "for the final products in the most full load operating condition". From the downstream steel trading companies, the Japanese manufacturers for the automotive and construction of the domestic processing center also showed a fiery situation.

Japan's steel industry is busy not making money"

Japanese steel manufacturers in January received a total of 6 consecutive months of steel orders higher than last year's performance. Construction and industrial machinery as the center, rising domestic demand in Japan, as the main thin steel stocks recently fell to the lowest level in 3 and a half years.

However, NSSC agency grow vines Takao said, "profit recovery is not sufficient". Since 2016, in order to pass on the increased cost of raw materials such as coal, NSSC require customers to increase 20 thousand yen per ton, but the real price will take time.

Because the profit level is low, NSSC April will once again be the price, but the customer's strong resistance, "said a car manufacturers will not easily accept". NSSC in fiscal year 2016 (ending March 2017) crude steel production is expected to reach 45 million 300 thousand tons, an increase of 1.7%, but the profit will be only 130 billion yen, down 35%. Japan's steel industry is in a state of no profit support.

On the other hand, also began to have the price environment. In China, which accounts for half of global steel production, the country's leading infrastructure investment is expanding, and the current crude steel production is at its highest level in 3 years. Affected by strong domestic demand, China's steel exports fell for 7 consecutive months in February. Chinese companies have been exporting low-priced products to other parts of the world have also changed the action, the steel market in Asia is gradually improving.

Anshan Iron and steel development direction is to capacity, production capacity or increase production capacity?" Tang Fuping, chairman of Anshan Iron and steel group was asked. Tang Fuping replied, Anshan Iron and steel production capacity to go to the task. Worried about the beginning of production capacity is not really get rid of, but after more than a year of effort, has been able to feel the benefits of production. Next, good production capacity to be retained, and resolutely removed backward."

The Chinese government, which has been criticized by the global steel industry for the cold snap, has urged companies to cut the production capacity of up to 1.5 tonnes of crude steel by 2020, equivalent to about $1 in overall capacity. 2016 production target of 45 million tons, the actual reduction of 65 million tons.

In the past, China's steel production capacity has not been improved due to local government and corporate boycott, but the situation is different. The Chinese government through the investigation of local government officials and other anti-corruption campaign pressure, in this context, China's steel prices rose after the summer of 2016 2-3.

Protectionism is a double-edged sword

Nevertheless, if China's high level of domestic demand unsustainable, low-cost excess steel will once again flock to the market. In March 24th, Japan iron and Steel Federation press conference, NSSC agency grow Fujitaka students said "China economic overheating appeared slightly". China's risk will have a huge impact on Japan's steel industry. But there is also a tendency to defuse the situation. That is the global trade protectionism.

To restore the employment of 10 thousand people, by the end of 2016, the U.S. steel giant Steel Corp (UnitedStatesSteel) CEO Mario Langhi (MarioLonghi) so announced. The steel industry in the United States is thought to have a structural depression, but the situation is changing.

In 2016, following the production of cold-rolled steel sheet, the U.S. government to further Japan and other countries of the hot rolled steel also levied anti-dumping duties, began to crack down on low-priced products. As a result, China's steel exports to the United States in 2016 fell by 64% year on year, the biggest decline in history. In this case, Trump appeared on the stage to show a more severe attitude.

Not only the United States, since 2016, India has also carried out on the hot rolled coil and other emergency import restrictions (SafeGuard).

"It's easy to imagine that trade protectionism will accelerate the overcapacity in the prospect of" Chinese cuts, Japan's JFE steel kakinoki thick said our president. Calamander believes that if the steel can not find a way out in the United States and Asia, China will have to promote structural reforms with pain.

However, focusing on the trade protectionism against Chinese products will also hurt the interests of japan. 2016 Japan's exports to the United States fell 16%, exports to India fell by 47%. In addition, China's production capacity may not be able to progress in accordance with the government's expectations. In order to restore the past profitability of the Japanese iron and steel enterprises, China's shadow is always accompanied by.