SHANGHAI, Jul 5 (SMM) — This is a roundup of news in the steel industry for last week.
Rapid rise in manufacturing prices effectively curbed by policies
According to China's National Bureau of Statistics, the purchasing price index of major raw materials dropped 11.6 percentage points on the month points to 61.2% in June, and the producer price index fell 9.2 percentage points to 51.4% from May. The purchasing price index of major raw materials fell significantly in all industries except for petroleum, coal, and other fuel processing industries. The producer price index fell in most industries, and dropped below contraction point in ferrous metal smelting and non-ferrous metal smelting and rolling processing industries. However, it stood above 70 and kept rising in petroleum, coal and other fuel processing industries.
A series of policies for ensuring supply and stabilising prices recently took marked effect, and the rapid rise in manufacturing prices was curbed.
PBOC to monitor the trade acceptance of pilot real estate enterprises under “Three Red Lines” policy
People's Bank of China have started to monitor the trade acceptance of pilot real estate enterprises under the “Three Red Lines” policy, requiring enterprises to report the trade acceptance data every month. According to industry insiders, the real estate trade acceptance data has not yet been included in the "three red lines" calculation indicators, and may be included in the future. The ”three red lines” refer to the debt-to-asset ratio excluding advance receipts higher than 70%, the net debt ratio higher than 100%, and cash short-term debt ratio less than 1 time. Pilot real estate companies must complete the debt reduction target by June 30, 2023.
NDRC to optimise county environmental infrastructure and improve garbage and sewage collection and treatment
The National Development and Reform Commission (NDRC) held the first national on-site meeting to make up for shortcomings in county towns in Liyang, Changzhou, Jiangsu. The meeting pointed out that the permanent population of some county towns is declining, and the over-advance and blindly construction is unacceptable.
The counties should focus on upgrading, expanding, and promoting the inclusive sharing of basic public services, improving the facility of medical and health, education, elderly care, cultural and sports, as well as social welfare. They should also make efforts to improve ecological environment, enlarge the capacities of county environmental infrastructure, and optimise the facilities of garbage and sewage collection and treatment, so as to strengthen the waste water treatment and low-carbon transformation.
China's chip shortage may be relieved in late July
The current chip shortage is likely to be eased in late July, according to SAIC. In a recent AGM, SAIC’s chairman Chen Hong said that the chip shortage is a problem faced by the automobile industry, and supply will basically return to normal in Q3 and Q4 2021.
China estimated to sell 153,000 heavy trucks in June
China is expected to sell around 153,000 heavy trucks in June, a decrease of 6% month on month, down about 16,000 units or 10% year on year. From January to June, heavy truck sales totalled 1.04 million units, an increase of 27.4% on the year. The cumulative growth rate was still high, but significantly narrowed by 11 percentage points from that in January to May at 38%.
Steel companies performed well in H1 2021
Steel prices hit a record high in H1 2021, and many steel mills made great profits, making the semiannual reports worth expectations. Nine listed steel companies have issued 2021 semiannual performance forecasts, of which 8 have exceeded the expected increase in profits. Nanjing Iron & Steel announced on June 26 that the net profit attributable to shareholders of the company in H1 2021 is estimated to be 2.26 billion yuan, a year-on-year increase of approximately 102.67%. Previously, Angang estimated the net profit H1 around 4.8 billion yuan, up 860% on the year, Shagang estimated it to be 360 million to 540 million yuan, up 42.69% to 114.04% on the year, and CITIC Special Steel estimated it to be 4.13 to 4.23 billion yuan, up 50.24% to 53.87% YoY.
Yangtze river basin initiated the IV-level emergency response to flood disaster
According to Changjiang Water Resources Commission of China’s Ministry of Water Resources, the IV-level emergency response to flood disaster was initiated on July 1. Since late June, 16 gauging stations of 10 rivers in the Yangtze River Basin have monitored the water level over the warning line. According to the forecasts, the heavy rains will move northward in the Yangtze River Basin, and south China will see more high temperatures from July 1 to 7. The region between Xiangjiaba and the Three Gorges, Wujiang River, and the mainstreams and south areas of the midstream of Yangtze River may have the accumulative rainfall at 100-200 millimetres during the 7 days.
