In the fourth quarter of 2012, CE Steel Industry Prosperity Index was 96.5, which was generally level with the previous quarter; CE Steel Industry Warning Index was 63.3, dropped by 3.4 points compared with the previous quarter, and it was still in a relatively cold state.
Look back to the 2012, the iron and steel industry prosperity showed a constant decline trend. On one hand, it was affected by the slowdown growth rate of domestic investment, the slack rebound in the demand for steel of the downstream industries; on the other hand, it was constrained by the serious surplus capacity of the iron and steel industry, and it was also related to the continued destocking process of the iron and steel industry. The macroeconomic rebound trend in the fourth quarter of 2012 and even in 2013 is conducive to the improvement of the operation of the steel industry, but the recovery of the prosperity may be a relatively long process.
Prosperity Index lays the foundation and it will go steady
In the fourth quarter of 2012, CE steel industry prosperity index was 96.5 (the growth rate of 2003 = 100), which was generally level with the previous quarter; the declining trend of the last three quarters was terminated and the prosperity index tended to be steady.
Among the six indicators constituting the CE Steel Industry Prosperity Index, the main business income, total taxes, number of employees and total profit (growth rate) increased to some extent, while there was a decline in exports and the total investment in fixed assets (growth rate). With the random factors being further eliminated, China's Iron and Steel Industry Prosperity Index was 95.1, with a marginal increase of 0.1 point compared with the previous quarter and a decline of 1.4 points compared with the Prosperity Index of the random factors that has not been eliminated. This indicates that the introduction of the measures of steady growth and the expected effect of accelerating the development of urbanization curbs the decline trend of the prosperity of the iron and steel industry to some extent.
The warning index is relatively colder
In the fourth quarter, China's steel industry warning index was 63.3, dropped by 3.4 points compared with the previous quarter, and it was in the critical point, indicating that the current steel industry is still in a relatively colder state. Comprehensively, the operation of the steel industry in this quarter will be at low levels and go steady.
Slow growth in production
As the destocking process of steel industry is not completed yet, the steel production remains to meet slow growth. After a preliminary seasonal adjustment, China's crude steel production was 161.703 million tons in the fourth quarter, with a year-on-year growth of 2.9 percent, and the year-on-year growth rate increased 0.6 point compared with the previous quarter, and decreased 9.6 percent quarter to quarter while the quarter to quarter increase of the previous quarter was 3.0 percent.
Sales meet a mild rebound
In the fourth quarter, being affected by the mild rebound of the real estate market and other factors, the steel market also showed little warmth. The main business income of China's iron and steel industry was RMB1.71418 trillion Yuan, with year-on-year growth of 3.7 percent, and the previous quarter decreased by 0.4 percent year on year; and it declined by 0.4 percent quarter to quarter, while the quarter-to-quarter decrease was 2.3 points.
Price decline trends to be slow
The sales recovery of the steel products alleviated the dropping trend of steel prices to some extent. In the fourth quarter, the cost price of the steel industry product dropped by 11.9 percent year on year, and the decreasing rate narrowed by 2.8 points compared with the previous quarter.
Destocking accelerated
Being constrained by the surplus production capacity, the mild rebound in the market accelerated the process of destocking. As of the end of the fourth quarter, the finished products funds of steel industry was RMB244.94 billion Yuan, decreasing RMB13.66 billion Yuan compared with the previous quarter; funds for finished production rose by 4.6 percent year on year, and the year-on-year growth rate declined by 10.3 points compared with the previous quarter.
The decline range of export narrowed
In the fourth quarter, China's steel exports continued to maintain a decline trend, but the decline rate has narrowed. After a preliminary seasonal adjustment, the steel export of the fourth quarter was US$12.86 billion, dropping by 1.2 percent year on year.
Profits switched to increase from decline
In the fourth quarter, being affected by the sales recovery, decreased costs and other factors, the profits of the steel industry switched to a mild increase from the a significant year-on-year decline in the previous quarter. After a preliminary seasonal adjustment, the total profit of the steel industry in the fourth quarter was RMB39.91 billion Yuan, with a year-on-year growth 6.4 percent, while it decreased by 84.1 percent year on year in the previous quarter; the quarter-to-quarter growth has exceeded 5 times, and the quarter-to-quarter decreasing rate of the previous quarter was 84.1 percent. In the fourth quarter, sales profit rate of the steel industry was 2.3 percent, rising 2.0 points compared with the previous quarter, but it was still significantly lower than the 6.5 percent of national industrial average profit rate on sales.
After a preliminary seasonal adjustment, the total loss of the deficit enterprises in the steel industry was RMB18.6 billion Yuan, which decreased by RMB5.36 billion Yuan compared with the previous quarter; the scale of losses was 21.8 percent, which was decreased compared with the 23.7 percent scale of losses of the previous quarter, and it was significantly higher than the 14.0 percent scale level of losses of all the industries.
Sharp rebound in tax revenue
In the fourth quarter, being affected by the sales recovery, the reversal of profitability and other factors, tax growth rate of the steel industry rebounded remarkably. After a preliminary seasonal adjustment, total taxes of the steel industry in the fourth quarter was RMB35.77 billion Yuan, with a year-on-year growth of 31.5 percent, and it decreased by 22.7 percent year on year in the last quarter; the growth rate was 52.5 percent quarter to quarter, and the decreasing rate of the previous quarter was 11.0 percent quarter to quarter.
The remittance status has not yet improved.
In the fourth quarter, the accounts receivable of the steel industry was RMB245.01 billion Yuan, with a year-on-year growth of 10.2 percent, and the year-on-year growth rate declined 3.7 points compared with the previous quarter. The turnover days of accounts receivable increased to 12.9 days in this quarter from 12.5 days in the previous quarter and the overdue obligations of the steel industry has not yet improved.
Investment switched to decline from increase
After a preliminary seasonal adjustment, the total investment in fixed assets of the steel industry in the fourth quarter was RMB102.9 billion Yuan, with a year-on-year decrease of 7.9 percent, and the year-on-year growth of the previous quarter was 7.4 percent; it decreased by 19.2 percent quarter to quarter.
Employment met a moderate growth
In the fourth quarter, the number of employees of the steel industry was 331.9 million, with an increase of 56,000 employees compared with the previous quarter; the number of employees increased by 1.5 percent year on year, and the year-on-year growth rate increased 0.4 points compared with the previous quarter. The moderate growth of the employees indicated that the operation of the steel industry was improving and the confidence has been enhanced with the recovery of the steel market demand.
