Analysis of domestic steel industry's mergence and integration

摘要

That steel products' price dropped sharply in 2005 resulted in over-supply in present domestic steel market. NDRC's director, Ma Kai, said in a statement in the beginning of December 2005, domestic steel capacity is 120 million tons greater than market demand, with 70 million tons of building capacity and 80 million tons of planed capacity. The great pressure lead domestic steel price to the lowest level in global market directly. State government's macro control has transferred in industry administration aspect. According to report of NDRC, during period of the eleventh five year plan, annual capacity of crude steel should be limited in about 400 million tons, and it will be eliminated 100 million tons of backward iron making capacity and 55 million tons of outdated steel making capacity. Fortunately, domestic steel demand is increasing though overcapacity has showed in domestic market. Further, as Chinese economic has stepped into heavy chemical industry period, domestic steel demand can not decrease sharply in short term. According to experts' research, there will be 300 million tons of steel products' consumption in 2006 only for eight industries, such as integrated construction, machinery, automobile, home appliance, railway, shipbuilding, petroleum and container. With other demand, total domestic demand on steel products in 2006 will reach 370 million tons (ex double counting), up 13.49 percent (44 million tons) compared with 326 million tons of apparent steel consumption in 2005, Therefore, how to transfer China to one strong steel country from one big steel country, through mergence to boost industrial competition, is a exact point needed to study.