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Small profit margins may face the blade iron and steel enterprises in transition times of low profits

    Financial crisis has not been fully strained, but has created a new economic pattern: more than 30 years supporting the rapid growth of China's economy has undergone major changes in the factors; international economic cooperation and show a new trend of protectionism.
    New energy, swing chain new technologies, capital and credit markets as the industry leader; traditional philosophy face more severe challenges ... ... for the Chinese private enterprises, these new changes, new patterns mean new challenges, but also contains an unprecedented major opportunity. China International Economic Development Research Center, a guest researcher Luobai Hui analysis of the industry that we must be based on current and long, and further innovative institutional mechanisms to optimize the development environment, encourage and support private economic pilot, bold innovation, seeking diversification, to speed up structural adjustment and industrial upgrading, out of a line with the actual transformation of Chinese private enterprises to upgrade the road.

    The face of overcapacity and the meager profits of the steel industry, China's steel enterprises in China become the world's largest steel producer and consumer countries, it begins to find another way out. State Council Development Research Center of Industry Vice Minister of Economic Research, said Yang Jianlong,iron chain large steel companies no longer possible to get the development through expansion, mergers and acquisitions in the way of expanding, to the vertical extension of the chain, efforts to develop "non-steel" industry , has become China's iron and steel enterprises in the new situation, a new choice.

    China's steel industry in recent years, China is becoming "the most unprofitable industry", the profit margin declined year by year the situation presented. According to CISA statistics, 72 medium-sized steel enterprises in return on sales was 7.5% in 2007, down about 5% in 2008, and in 2009 dropped to 2.8%. 2010 data are not ideal, and medium-sized steel enterprises annual average sales profit rate of only 2.91%, far below the national average of 6% of industrial profit level.

    February this year, he became the official unloaded Wuhan Iron and Steel Association for Iron and Steel Group General Manager, Qi Lin Deng said that China's crude steel output last year exceeded 600 million tons, 6.3 million tons, more than economic development, forcing the steel, iron and steel supply and demand contradiction price decline. In addition, since early last year, imports of iron ore, coking coal and other raw fuel procurement costs continue to rise, only one imported iron ore in 2010, China imported more than 600 million tons of iron ore, steel prices to an annual loss of thousands of enterprises billion yuan, all entered the iron and steel production costs. Decline in steel prices, production costs increased significantly under the dual pressures of iron and steel enterprise production and management difficulties.

    "China's steel industry capacity rapid expansion of the era has been completed. Enterprises involved in non-steel items is an inevitable trend." Chinese Academy of Engineering Zhang Shourong said steel production business faces serious excess capacity, low industrial concentration, control, weak, and resources , energy, environment Triple increasing pressure. Many factors, will lead China's steel industry into the transfer structure, transfer mode, the slow growth era.

    Large steel enterprises in China have have accelerated the pace of diversification. In the major steel prices have been released, "Twelfth Five-Year Plan", agreed that the should speed up the "non-steel" industry. Wuhan Iron and Steel last year's "non-steel" operating profit reached 18 billion yuan, accounting for more than half of total profits. Planning to "Twelve Five", Wuhan Iron and Steel "non-steel" industry revenue more than 110 billion yuan, 360 billion yuan of the total planned income ratio of more than 30%.

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