Analysis of the price trend of China’s steel market in 2018
See the current complex situation of the steel market, control the price trend of the steel market in 2018; talk about seven hot market situation issues closely related to steel supply and demand and price trends.
First, China has adjusted its structure, promoted supply-side reforms, and transformed economic development methods. Deep and historic changes are taking place in many fields. Steel production capacity has achieved stage results. For the steel industry to establish a balance between production and demand in the future, steel prices fluctuate at a high level, and lay a foundation for the healthy development of the industry market. The task of deepening supply-side reform has a long way to go.
At the end of 2015, as steel prices continued to fall, market prices were far below industry costs, and the industry has fallen into the trap of more than $100 billion in serious losses. One of the points is that steel can’t sell cabbage prices. However, with the increase in capacity, the price of steel has continued to rise madly. In the past two years, the price of large rebar in the steel market has risen from less than 2,000 yuan to nearly 5,000 yuan a ton. In 2017, the steel industry realized a profit of 341.9 billion yuan, and the profitability of enterprises with good profitability was close to 1,000 yuan. The profit of Baowu and Shagang exceeded 18 billion yuan. It not only improves the profitability of the steel industry, but also creates loose conditions for steel companies to leverage, reduce the debt burden, and accelerate the transformation and development of the industry.
The expansion of scissors is not sustainable: from the recent government control of electric steelmaking, we can clearly see the true intention of the government to reduce capacity. Not only to go over excess capacity, but also to help the industry out of losses and profits. Establish rationalization of upstream and downstream enterprises and industry profit structure, and create conditions for the transformation and development of the steel industry.
In 2017, the focus of the steel industry’s structural reform on the supply side was to remove excess capacity. After two years of hard work, the country has phased out the backward production capacity of 110 million tons. 722 households of medium frequency furnaces were shut down, involving 140 million tons of production capacity. The situation of severe steel production capacity has basically been resolved. Optimized steel production capacity, especially for building steel. Steel equipment needs to be overhauled, and generally 75% of equipment utilization is a good international level. In fact, steel companies are basically full-load production, and equipment utilization exceeds 80%. Since there is no serious excess pressure on crude steel production capacity, this basic balance of supply and demand is actually the basic condition for supporting the high price fluctuations in the future steel market. This will lay the foundation for the future balance of production and demand in the steel industry, avoid excessive price competition, high fluctuations in steel prices, and healthy development of the industry market.
In fact, the serious losses in the steel, coal and non-ferrous industries reflect the serious imbalance in the profit pattern of the upstream and downstream industries. This is not only not conducive to the transformation and development of these industries, but also has an adverse negative impact on the overall stable development of China’s economy. By removing excess capacity, the government has helped these industries to get rid of excessive competition and get out of losses. It is beneficial to establish an overall balanced industry profit pattern. Practice has proved that steel production capacity has achieved initial results.
The focus of the supply-side reform has shifted from steel production capacity adjustment to restructuring and transformation. The phased results of steel to capacity production mean that fundamental market relations have undergone fundamental changes, solving new transformational developments, and deepening the contradictions accumulated in the structural reforms have been put on the agenda. This is the driving force. . However, the situation of the economic market in the steel industry is far more complicated than this. In particular, the transformation and development of steel enterprises faces many major tasks. The focus of the supply-side reform is to promote the transformation and development of enterprises in a comprehensive and coordinated manner, and comprehensively promote the solution to the strategic problems of enterprise development, and not focus on the excess capacity. The key to the transformation of the enterprise and the reform of the supply side cannot be considered to be to excess capacity.
For example, breaking the restrictions on the ownership structure of ownership and capital management systems, promoting corporate restructuring, and improving industrial concentration and competitiveness are the major trends in the development of the industry; the development of non-steel industries, especially state-owned large steel companies, including enterprises, including labor. All kinds of production and operation resource elements are rationally allocated in the adjustment of the social economic layout structure, thus creating labor productivity at the per capita social level. Let the old state-owned enterprises completely get rid of the heavy burden and shoulder the social responsibility of creating regional economic prosperity; adhere to scientific and technological innovation, and let the products have competitive advantages in the new field of technology, new field, high quality and brand advantage. The task of building a modern steel supply chain in the era of large logistics is a major trend in the supply-side reform in front of steel and logistics companies. This is also an important market pressure.
With the Belt and Road and the economic rise of developing countries, the international steel industry has shown an increasing trend. Through the Middle East war, it can be seen that the expansion and development of the international steel industry is facing a slow increase. The participation of Chinese steel companies in the international market and the large logistics distribution of the supply chain are also important tasks for the transformation and development of steel companies.
These tasks are actually a systems engineering, but they also require a major breakthrough. Its future process is directly related to the rise and fall of the enterprise. Based on these thoughts, I wrote a paper on the supply side of the steel to achieve a phased outcome. He also called Li Zhijun, the logistics reporter, and suggested to publish this article as soon as possible. The intention is to base on the supply side to achieve the staged results of production capacity, and expect the government to shift the supply-side reform focus to structural adjustment, comprehensively promote the steel industry deepening reform, and accelerate transformation and development.
It is this obvious downward pressure on the economy and the current balance of production capacity and demand in the steel industry, as well as the high profitability of the steel industry. The National Development and Reform Commission has also adjusted the guiding ideology for the supply side reform of the steel industry in the future: it proposes that 2017 will be the backbone of steel production capacity. In the year to come, the supply-side reform should be comprehensively promoted in the future to promote the transformation and development of enterprises. At the same time, it is proposed that the future will adhere to the general tone of steady progress, and coordinate the key tasks such as capacity withdrawal, employee resettlement, mergers and acquisitions, transformation and upgrading, supply and demand balance and price stabilization.
This has made people see that the government’s overall regulation of the steel industry in the future will shift from the focus of last year’s focus on capacity to the comprehensive transformation of the steel industry. Effectively solve the major problems facing the transformation and development of enterprises. But solving these deep economic problems is far more difficult than imagined. The government is currently only staying at the level of propaganda, far less powerful than the ability to go. Moreover, many transformation issues involve the government’s transformation of functions, how to break the traditional interest pattern constraints, realize the transformation and development of capital management, and then promote the transformation and development of production and operation.
Second, the steel market is facing the evolution of the world economy. The trend of international steel growth determines that China’s steel exports will once again show an increasing trend. After all, steel exports are an important factor in adjusting the balance of supply and demand in the domestic market.
The development of this domestic and international economic pattern has also profoundly affected the steel market, the steel industry and the steel logistics industry. The current Belt and Road national economy has shown a rapid growth trend of 4.6%. In 2016, the investment in the construction of national infrastructure in the Belt and Road is close to 500 billion US dollars. And it grows at a rate of more than $100 billion a year. Become the most investment-rich region in the global economy. International steel in these regions and countries has shown a rapid growth of 4%. The steel trade war provoked by the United States will add negative factors to the world steel market, but it is difficult to stop the international steel industry from entering a period of slow expansion.
This trend determines the trend of higher prices in the international steel market in 2018. This situation also adjusts the international steel layout structure, transformation and development, builds international steel supply chain logistics, expands steel exports, and stabilizes domestic steel supply and demand relations for Chinese steel companies. After the domestic market has gone out of the first two months of this round of price declines, the price has rebounded and entered the reasonable price area, which is conducive to maintaining stable price operation and providing a better opportunity for longer-term international demand.
According to statistics, 65 countries along the “Belt and Road” have a consumption of 340 million tons of steel in 2015, while the output is 280 million tons. Steel consumption in 2017 has exceeded 370 million tons. In India, some countries in Southeast Asia have even experienced nearly 10% increase in steel use, and South America has seen an increase in steel for the first time in 2017. This trend determines that China’s steel exports fall by 30.5% is only a phased feature, and future exports have an increasing trend.
Affected by the vigorous increase in production capacity and steel prices, China’s steel exports have continued to decline for a year and a half. In 2017, China’s cumulative export of steel products was 75.43 million tons, a year-on-year decrease of 30.5%. China’s crude steel production accounts for half of the world’s total, but in 2016 China’s cumulative exports of steel reached 10.843 million tons. This export volume accounts for only a quarter of international trade. In 2017, it fell to one-sixth. Even if the export fell sharply, it did not affect the domestic steel prices all the way up. The decline in steel exports continued until January this year, the actual export of steel products was 4.65 million tons, while the steel exports of major international steel producing countries increased.
In addition to the world economic downturn last year, the international steel trade protection has risen, and anti-dumping pressure has restricted steel exports. In fact, another important reason is that domestically vigorous production capacity has caused the steel price to rise sharply, making some steel billets and steel products prices and The international market once appeared upside down, which is an important reason for the impact of steel exports.
In order to encourage Chinese steel exports, since January 1, 2018, the government has cancelled the temporary tariffs on the export of bars, rebars and wires, and lowered the provisional tariffs on the export of 200 series of hot-rolled stainless steel coils, steel ingots, billets and some ferroalloys. . In February of 2018, the national steel export volume was 4.847 million tons, an increase of 4.2% from the previous month; the import volume was 1.027 million tons, down 13.8% from the previous month; the net export steel was equivalent to 3.82 million tons of crude steel. Considering the number of days in February, the actual export strength increased from the previous month. 10.4%. The trend of increased exports has been shown.
As the government will not continue to repeat the large-scale de-capacity of administrative methods and the slowdown of the total demand for steel in China, the steel export situation in 2018 will become an important factor that directly affects whether the steel market price can be operated at a high level. It is believed that it will not take long, as the recent domestic steel market prices fall sharply, the pressure of weak demand continues and the market price stabilizes. With the rising trend of international steel market prices, China’s steel exports will once again show an increasing trend. After all, steel exports are an important factor in adjusting the balance of supply and demand in the domestic market. This has determined that the steel industry, including the pipe industry, special steel, and coating industry, should focus on the long-term, and must use innovative cooperation models to cultivate their own cross-border trade.
Third, the pressure of social and economic transformation and development will continue for a long period of time. The decline in the growth rate of major economic indicators will affect the high overall demand for steel, and will affect the steel market in a normalized trend.
In 2017, China’s gross domestic product (GDP) accounted for about 15% of the world economy, an increase of more than 3 percentage points over five years ago, ranking second in the world. China’s total economic output reached 82.7 trillion yuan, The average exchange rate is more than $12 trillion. The Chinese economy has entered a period of transformation and development. The contribution of consumption growth to the economy has reached 60%. Several major economic sector indicators closely related to steel market demand have shown a slowdown in growth. For example, the total production of manufacturing has entered a stage of overall surplus. In the past few years, new steel mills and aluminum mills have produced GDP. Now this opportunity is gone. Even though the central and western regions still have great economic development potential and infrastructure investment potential, the increase in manufacturing capacity opportunities in these post-economic regions is also constrained by the overall overcapacity in the country.
At the same time, social fixed assets investment in 2013 was 63.17 trillion yuan, but the growth rate has dropped from double-digit growth a few years ago to 7.2%. The annual real estate development investment was 1,097.9 billion yuan, an increase of 7.0% over the previous year. Among them, residential investment was 751.48 billion yuan, up 9.4%; office building investment was 676.1 billion yuan, up 3.5%; commercial business housing investment was 156 billion yuan, down 1.2%. Although this year’s new highways are 5,000 kilometers, 20 high-speed railways are under construction, and investment exceeds one trillion yuan, the growth rate of fixed-asset investment this year will still be lower than last year.
China’s economic growth has shifted from high speed to medium speed. Three years ago, I wrote about the long-term pressure of the downward pressure on the economy. This is precisely the signal of transformation and development. This is not the same as the bad economy. This is in line with China’s industrialization and urbanization to a certain stage and enters the law of economic development during the transition period.
In 2017, China’s total economic production GDP was 6.9%. The downward pressure on the economy this year will exceed last year. The economic figures brought about by the price increase of bulk commodities in the early stage will no longer exist. The government announced economic growth is expected to be 6.5%. The current fashionable style is not to GDP. In fact, it is necessary to accelerate the adjustment of the economic layout of the central and western regions and improve the economic and social structure through transformation and development. In particular, we will improve people’s livelihood, rectify the environment, transform agriculture, improve the quality and competitiveness of economic development, and promote coordinated social and economic development. But after all, GDP is an important indicator of the world’s strength in measuring the country’s economic development. Just as the special steel industry wants the economic competitiveness of transformation and development, it is necessary to coordinate the development of the economy. Only in this way can China’s economic transformation and development achieve a real big step forward.
This kind of transitional economic development will inevitably lead to a slow decline in the total consumption and total output of China’s crude steel. In fact, China’s crude steel output in 2014 was 822.7 million tons. In 2015, crude steel output was 804 million tons, down 2.3% year-on-year. If we consider the increase in exports in the same year, we have actually shown that the total amount of steel used in China has dropped. However, according to statistics: the actual total consumption of steel in China in 2017 was 725 million tons, an increase of 7.7% year-on-year. In 2017, China’s crude steel output was 83.73 million tons, an increase of 5.7%. A record high.
The increase in crude steel output since 2017 does not reflect the change in real crude steel output and total demand. The Chinese economy in transition is facing a long-term downward pressure on the economy; fixed asset investment has shown a significant downward trend; steel Demand is actually in the midst of a slowdown. Due to China’s huge potential demand and economic imbalance, China’s total steel demand will remain at a high level. Grasping a large number of short-term potential demand and expanding investment are important measures for the government to drive and stabilize the economy. It is decided that there will be no roller coaster changes in China’s total steel demand.
However, in 2017, China’s crude steel output has a strange statistical result. The output of crude steel does not fall, but rather increases. This phenomenon will mislead people to judge the demand situation of the steel market. Minister Miao of the Ministry of Industry and Information Technology told reporters that the increase in crude steel output this year was determined by supply and demand. In fact, this is how to truly assess the trend of China’s total crude steel production and the annual consumption of domestic steel.
Because many medium-frequency furnaces and strip steel enterprises adopt night production, they are shipped to the market during the day, and the capacity of China’s banned intermediate frequency furnace has reached 140 million tons. The amount of conservative steel production is nearly 60 million tons. Tens of thousands of tons of steel production are not included in national statistics. In the more than one year before the first half of 2017, it was the peak period for shutting down the intermediate frequency furnace in China. For the market share of the strip steel that has been included in the total amount of social consumption, it can only be supplemented by the production of steel companies with statistics. This has formed the phenomenon that the total crude steel output from statistics has not decreased but has increased since the end of 2016. When the International Steel Association announced the global crude steel output in August 2017, the reason for the increase in China’s crude steel production was adopted. It can be seen from the fact that the output of hot-rolled coil and cold-rolled sheet has not increased as compared with the same period of last year, and the supplementary increase is almost concentrated on construction steel. This has a direct causal relationship with the change in capacity and the growth of crude steel output with statistics. This indicates that the government statistics in previous years are difficult to reflect the total apparent steel production and steel consumption in China, including the intermediate frequency furnace. This means that the highest annual output of crude steel in China’s history is not 822.7 million tons, but about 8.6-870 million tons.
It should be noted that in the second half of last year, China’s crude steel output has been largely unaffected by the strip steel, and the statistics began to reflect the real monthly crude steel production changes in China. Although the monthly production is still year-on-year, it continues to increase due to the impact of the production of strip steel in the previous year. However, the monthly output has shown a downward trend. If the time is pushed to July-August this year, we can get a true curve that reflects the slow decline in steel production. With the advancement of this curve, we can not only find many problems, but more importantly, find the trend of crude steel production and consumption total before and after a valuable steel consumption saturation point in the world’s largest steel consumption country. Obviously this is also a major event in the history of the Chinese steel market.
It is for this reason that I said at the first meeting of this year that it is archaeology, but also to test the highest saturation point of China’s crude steel production and steel consumption. However, today I am talking about the slow decline in crude steel production, which is to remind people to pay attention to the impact of crude steel production and the slow decline of China’s steel consumption on China’s future steel market supply and demand relationship and price trends. Affected by the decline in fixed asset investment, especially the demand for construction steel will also fall, and it is not even ruled out that the total demand for construction steel will show a significant downward trend this year and next. However, the market demand for building structural steel, including special steel pipe, has increased.
Fourth, environmental remediation will still cause some polluting capacity to withdraw from the market. It will also give the steel market an opportunity to price. At the same time, the accelerated construction of electric furnace steel will bring new pressure on the growth of China’s steel industry capacity in the future.
First, environmental remediation will bring vitality to the market
At present, the steel industry’s production capacity and total demand are basically balanced. Equipment utilization from statistical capacity has been much higher than in Western countries. The national policy in 2018 is mainly to prevent the closure of enterprises from resuming production according to law, to monitor the replacement of production capacity according to law, and to control the construction of new capacity projects. In particular, the State Administration of Quality Supervision has formulated illegal acts of unlicensed production of steel and cement products. Everyone is very concerned about the continued production of China’s steel in 2018. After two years of government’s excess capacity, it has achieved initial results. Can not expect the government to continue to vigorously go to capacity in 2018, once again deducting the crazy rise in steel prices in 2017.
In particular, the Third Plenary Session of the 19th CPC Central Committee opened the historical prelude to deepening the reform of the party and state institutions, reducing the operating costs of the government, accelerating the modernization of the national governance system, and removing the obstacles to the institutional mechanisms that constrain development. Recently, the reform of the functions of the state government has intensified. The National Development and Reform Commission will completely abolish the examination and approval of specific matters, and transform macro-planning and policy research. In order to fundamentally solve deep-seated contradictions and problems, we must ensure that the cause of the party and the state continues to advance through reform. One of the important issues is that the government must govern in accordance with the law and give play to the leading role of the market in resource allocation. This resource refers to all the factors of production and management of the market economy and enterprises, as well as corporate capital, production capacity, production, and mergers and acquisitions. But it is important to cultivate the construction of market regulation mechanisms. This is the current short board.
It is this background situation that we have reason to believe that we cannot expect the government to continue to use the administrative method to vigorously increase production capacity in 2018, and stimulate the steel market price to once again play a crazy upward trend in 2017. It is also the reform direction of the government in accordance with the law. Governing the environment is an important task for China’s economic restructuring and enterprise transformation and development. It is decided that the government will continue to strengthen environmental governance in the long run according to law. This year’s winter heating period production measures, control of air pollution have achieved important results and experience. President Xi recently said that it is necessary to implement the most stringent ecological environmental protection system, establish and improve environmental and health monitoring, investigation, and risk assessment systems, focus on prevention and control of air, soil and water pollution, comprehensively rectify industrial pollution sources, and effectively solve the impact on the people. Health highlights environmental issues. The Ministry of Environmental Protection also proposed not only to strictly control pollution, but also to strengthen environmental remediation from the regional structure. Atmospheric environmental problems are mainly pollution problems and pollutants exceeding environmental capacity. The Beijing-Tianjin-Hebei region is still the main area of air pollution in China. In order to meet the regional atmospheric environmental capacity control target, Hebei Province has proposed to reduce the steel production capacity by 10 million tons in the polluted areas concentrated in iron and steel enterprises. According to Xinhua News Agency, this year the government will reduce the steel production capacity by 30 million tons. Among them, it is mainly proposed from the perspective of environmental protection regional structure.
This year, due to environmental protection requirements, the organization of the wrong peak production measures will be implemented. Due to regional environmental protection problems, rectification and shutdown, relocation, and capacity replacement will affect the production capacity of steel enterprises. But in essence, this is environmental protection. It is not a traditional excess capacity.
Recently, Minister of Environmental Protection Li Ganjie pointed out: The air pollution situation is still grim. Beijing-Tianjin-Hebei is still the main battlefield for air pollution control. Up to now, the Ministry of Environmental Protection has issued 322 letters of supervision to 28 cities in Beijing, Tianjin and Hebei. There will be no retreat for illegal enterprises. If the local government does not promptly rectify the illegal enterprises, it will be held accountable. Among them, only Tangshan City, Handan City and other cities have introduced the 2018 non-heating season peak production plan of the steel industry. The basic production limit is 10%-20%, and the total production limit of the blast furnace production capacity is 9.875 million tons. It is the government’s efforts to increase environmental rectification in accordance with the law in 2018. This is a general trend that will bring opportunities for price dynamics in the steel market.
Second, the construction of electric furnace steel will have a big development, which will increase the production capacity pressure on the steel industry.
Although the government is currently consolidating the results of capacity reduction, there is still no clear policy for the development of electric furnace steelmaking. Although the tens of millions of tons of electric furnaces under construction are controlled by the government’s capacity building, the overall growth is still a rapid growth trend. After all, China has entered the period of rapid growth of scrap. The “Thirteenth Five-Year Plan” will be a major turning point in the development of China’s scrap steel industry. There will still be a big development in the use of scrap steel smelting electric furnace steel.
The global scrap steelmaking ratio is showing a rapid increase. In 2016, even if China considers strip steel, the scrap steelmaking ratio is only 15.8%, and the proportion of electric furnace steel is only 6%. After all, China’s scrap exports in 2012 were 2.203 million tons, while in 2016 it only exported about 1,000 tons. Compared with 34.2% of the world, and the United States, Japan, and Europe, it is 71.7% and 54.8%, respectively. 31.9%, the gap between scrap and scrap is larger, and there is huge room for improvement in the future.
In 2017, China’s scrap consumption reached 140 million tons, and scrap recycling has entered a new stage of regulation. According to the data of the scrap industry association, after years of development, China’s scrap steel resources have reached 8 billion tons. In 2016, the amount of scrap produced by the society reached 1.6-170 million tons, and the steel mill produced its own scrap. The total supply of scrap exceeded 200 million tons. China has entered the large-scale use period of scrap steel, and the scrap supply has been able to support the large-scale use of short-process steelmaking. It is estimated that the supply of scrap will reach 270 million in 2020, and the supply of scrap is sufficient. The “Thirteenth Five-Year Plan” will be a major turning point in the development of China’s scrap steel industry. As the national steel stocks continue to increase, it is also an important climbing period for social scrap resources, which will help accelerate the construction of electric furnace production capacity in China’s steel industry. This is how the Liaocheng Pipe Industry can grasp its policy opportunities and establish its own industrial chain and tube billet production base through innovative models. This is indeed a problem and opportunity worthy of attention.
The government also encourages companies that meet the policy to expand their electric furnace steel smelting capacity. However, there is still no clear policy. Due to environmental constraints, the government’s regulation of production capacity factors will not explode. This determines that there will be some excess pressure on China’s steel production capacity, but steel companies still have the ability to control production based on market demand. In fact, the market economy industry capacity must have a certain excess pressure on the industry to withstand excess capacity. Maintain a certain degree of market competition pressure. This is the necessary market condition for promoting the survival of the fittest and the transformation and development of steel companies. It is also a necessary condition for promoting the construction of market operation mechanism.
V. The traditional steel logistics model is facing the pressure of transformation and development. It is necessary to speed up the construction of modern steel supply chain logistics and accelerate the construction of market mechanism for the adjustment of supply and demand and the stable operation of the market. This is directly related to the ability to resolve market risks in the future and maintain stable market prices.
In fact, cracking the deep-seated market contradictions, reducing the drawbacks of traditional logistics, and building a large logistics chain for steel supply has become an important factor directly affecting the operation of the steel market. The construction of modern market supply and demand relations and price stability mechanisms are related to the transformation and development of capital management. Because I am talking about the steel market situation and price trend today. I will use this steel supply chain construction as an example to illustrate the impact of transformational development on the trend of the steel market. De-capacity has created conditions for steel prices to climb. The price of steel has risen for two years. By mid-December last year, the price of large rebar reached 5040 yuan a ton. As for the price of steel in the market, it cannot be compared with 2008 and 2011. It is the peak period of global inflation, and the current economic situation is not. A high profit of thousands of yuan will inevitably stimulate steel mills to increase production and increase social stocks. This is a market mechanism.
Although there are dozens of Chinese steel e-commerce, it is still stuck in the online steel trading model. Steel mills and traders do not form a community of interests that serve consumers in the sense of supply chain sharing. Not really a steel supply chain service. The Chinese steel market is still stuck in the traditional trade pattern of 100,000 steel traders buying and selling steel.
In late December last year, the high price of the steel market was staged and the price dropped sharply. There are many practical factors. But why did the steel market price drop nearly 1,000 yuan since December last year? The deeper reason is that steel traders and steel mills are independent market operators. The risk of falling market prices can only be borne by steel traders for many years. In order to avoid risks, steel traders can only choose to compete to lower prices to prevent greater price risks in the later period. This kind of traditional market trading mechanism, isolated steel traders are fighting each other, it is difficult to form a market price risk sharing mechanism. Once the price falls back, the risk is defeated. There is no reasonable price control mechanism at all, nor can it organize a reasonable line of defense to control price declines. Therefore, the price fell 1,000 yuan, can not blame the specific dealers, can only find reasons for the lack of price stability mechanism in the market.
We say that the market steel owners are steel traders. Market interest, price loss or risk loss is a steel trader. After the price increase, the high price advantage is the steel mill, and the low price loss after the price drop is also the steel mill. Steel mills and steel traders have common interests, but the traditional logistics system has no risk sharing and benefit sharing mechanism. There is also no stable market price mechanism power of the modern steel logistics service system. At present, Baowu Group vigorously develops third-party logistics and promotes the integration of steel mills, steel traders and e-commerce in accelerating the construction of modern steel supply chain logistics, reflecting this trend.
In fact, ten thousand tens of thousands of steel traders were profitable ten years ago. In recent years, the profit environment has become more and more difficult. Many small and medium-sized steel trades have withdrawn from the market, and big steel traders are also facing many operational difficulties. This is actually reflected in the normalized market situation, the pressure of the transformation of the logistics model is increasing. It is precisely for the current traditional market circulation system, in the face of the risk of falling market prices, steel mills should be kind to steel traders. Remember the O7 North China Wugang Plant leading the market? More than a month ago, this steel price plunged, I wrote: steel mills can only cut production, cut prices, if many market contradictions have been resolved. The price will definitely pick up soon. After all, the serious loss pressure of steel traders is also the driving force for the price increase. The basic support condition is that the de-capacity has already solved the serious overcapacity situation. Steel companies have the ability to regulate production and dominate prices. But the market relationship must be handled well. This is also an important reason for the market trend. At that time, some people said that steel mills increased their sales. In the sense of supply chain reform, it is true that the steel mills have invested in the supply chain. However, it is wrong to reduce the risk of the market price at that time, and the market price will be even lower. What should the steel mill do? Therefore, how to deal with the complex market interest relationship at that time as soon as possible, it is very important for the steel market to get out of the current risk dilemma. It is difficult to get out of this round of market price risk shocks.
Steel traders market operations are increasingly feeling that operating costs are getting higher and higher, and it is difficult to make development and make money difficult. In fact, it is this kind of trend of the staged development of China’s market economy that has become the driving force behind the transformation and development of steel traders and the innovation of steel supply chain logistics service model. Rely on the competitive advantage of the new model to expand the scale of operations and profit model. It is clear that the difficult operation and transformation of the market are two burdens on the shoulders of steel traders.
The traditional sales model is facing a historic decline. The new service model of the steel supply chain gradually realizes the transformation and development of the steel trade industry in the innovation, and finally forms the competitive advantage of the overall market service of the steel supply chain. This clearly tells us that the future market competitiveness is not the big steel traders in the current sense, but the scale effect of the new steel supply chain service model, service competitiveness and market brand influence. Steel mills and steel trade entrepreneurs have already felt the pressure of the transformation and development of China’s steel logistics.
Fully grasp the three key areas of innovative steel supply chain logistics, and take the road of strengthening and coordinating development:
I. Development strategy integration and cooperation, integrating resource elements in all links of the steel supply chain, and enhancing the overall service competitiveness of the supply chain
The strategic goal of the steel supply chain is to sell steel products to the original decentralized steel mills. Many traders sell their products in the market. The traditional steel sales model that customers purchase from the market is transferred to the trade service as the core, with regional e-commerce as the The platform transforms steel logistics from steel mills to consumers into a one-stop third-party supply chain. This requires the development of strategic cooperation between steel traders and steel mills in the regional target market resource allocation; the overall business of steel trade supply chain services from steel mills, steel traders to steel warehousing, deep processing and distribution, marketing, channel management, Customer sales and after-sales services, e-commerce and financial cooperation in all aspects of the steel supply chain services. Promote the integrated development direction of all links in the supply chain. Steel mills should develop low-three-party logistics and use capital management methods to promote strategic cooperation and capital integration between steel mills and steel traders, and enhance overall service functions. Only by breaking this institutional barrier can we create a full-featured service capability of the steel trader supply chain and a prototype of the modern steel supply chain. And through the large regional market e-commerce platform to achieve one-stop full service.
Through the integration of market logistics elements, we will achieve interconnection and interoperability, maximize the optimal utilization of market logistics resources, reduce logistics costs and social inventory, enhance service functions, and improve logistics service efficiency. What has changed here is only the existence of a certain advantage of steel traders. The harvest here is the birth of China’s modern steel supply chain and the transformation of steel traders.
Second, accelerate the deep integration of the steel supply chain and e-commerce, so that the modern steel supply chain logistics will take off the wings
The penetration of e-commerce technology into the production and distribution services of steel logistics is a major trend. Recently, President Xi also proposed to promote the integration of e-commerce and the real economy of the enterprise. This new steel logistics economic format is leading the trend of the steel logistics model innovation. Steel mills and many steel traders are also seeing this. They all think that their logistics business should introduce e-commerce. It is for this reason that we believe that steel e-commerce is more than just online trading of steel. But through the joint efforts of steel mills and traders, the integration of e-commerce into all links of the steel supply chain, the formation of a supply chain e-commerce service platform for large regional markets, and accelerate the cultivation of new formats and services in the steel market supply chain services. Advantage. In this sense, steel traders in large regional markets should have their own large platform for e-commerce services. But in practice, how to test the wisdom of steel traders.
The rise of e-commerce has not only impacted traditional businesses, but also reduced logistics costs, and provided new impetus to the innovation and development of logistics models. The problem that steel traders are worried about is not e-commerce, but how steel traders can enhance the development of business transformation services in the integration of e-commerce, and realize the large-scale market development and brand building in the innovative supply chain service mode.
3. Cultivating the large-scale steel market. The modern steel supply chain is the focus of steel traders’ investment in steel logistics reform.
It is different from the national circulation of small commodities. Steel resource distribution services have regional characteristics of the large regional steel market. People living in Beijing can purchase small commodities online from Shanghai and Guangzhou. However, Wuhan customers are unlikely to buy steel from the Jinan market. The national nature of the steel market is determined by the fact that steel is shipped from steel mills to a large regional steel market. Distribution from the regional steel market to demand customers. This determines the large regional characteristics of the distribution of resources in the steel market. It also determines that the construction of modern steel supply chain requires steel traders to attach great importance to strategic cooperation and resource integration of logistics service resources in the regional steel market. Focusing on the regional steel market and building the advantages of modern steel supply chain logistics services. This is also the base for the transformation and development of regional steel traders.
In the construction of large-scale steel supply chain, steel mills and steel traders should pay special attention to the integration of logistics factors; electricity and business integration; capital integration and service brand influence construction. Promote the integration of steel mills and steel traders in the construction of large logistics. This does not affect the future cross-regional operation of steel traders with advantages and the development of international operations through the policy of transnational free trade zones. This is only the extended competitiveness of the modern steel supply chain service channel model. This is the true value and vitality of the steel supply chain; the brand is the flag established by steel trade entrepreneurs in the construction of the steel supply chain. It is precisely because of the influence of the modern steel supply chain service brand formed in practice that it can achieve open development.
To solve these problems strategically, we can only seek new ideas from the general trend of deep economic relations in the market. If we neglect to start from the goal and break through the deep-seated market economy, there will be no real innovation. In particular, the old interest pattern model that plagues steel traders promotes the deep integration of assets and supply chain elements. To solve these problems is precisely to seize the opportunity, and constantly create comparative advantages through innovation, and ultimately form the overall market competitive advantage. Responsible for the era of building a large logistics service in the modern steel supply chain.
Sixth, adjust the relationship, control the general trend, and maintain the stability of the steel market this year.
After the whole year of last year, with the pressure of de-capacity and market resources, the price of steel market is crazy. In December, under the normal situation of environmentally limited production and production cuts, but demand also fell, the steel market prices began to fluctuate at a high level. The steel price in this market fell by nearly 1,000 yuan, and steel traders suffered heavy losses. The price of steel mills was once upside down, and the market’s fear of weakness has seriously affected the enthusiasm of steel traders for winter storage. In January, Zhang Honglin wrote about the winter storage policy of Shandong Steel Works, and the market is full of expectations after the holiday. Market sentiment was quickly adjusted. When I forwarded it, I said: Only the price reduction of steel mills is basically in place, and the price policy of steel mills fully takes into account the risk of market fallback. The contradiction of this wave of market price falls basically. Waiting is a wave of price increases, which is also in line with the interests of steel mills. This kind of understanding of the market actually sees the fundamental supporting role of the balance of production capacity on the price recovery.
A netizen from Fujian Quanzhou told me that her inventory has lost 200 yuan per ton. How do I see the market and how to deal with the market. The steel mill lowered the price and opened the prelude to the Ding Dong store. The contradictions in the market relationship and the loss pressure of the steel traders’ previous steel price drop of 1,000 yuan will cause the market to perform a wave of rising prices. The goal has been reached. According to the statistics of China Steel Network, the market in each region is still fluctuating and rising in the week after the year. Among them, the thread in the region has the highest increase of 310 yuan. Its main driving force is environmental protection and production. However, due to the weak demand trend, businesses still have to pay close attention to changes in social inventory variables and steel mill inventory. The hot issue of appeal is not only the situation facing the steel market, but also the cultivation of market regulation mechanism. It is also a problem of the transformation and development of the steel industry, and it is also an important factor affecting the supply and demand relationship and price changes in the steel market.
However, the high expectations for the market have also caused stocks to soar to 19 million tons. The steel social inventories are significantly higher than the normal level of 8 million tons in history. High inventory risks have caused the market to lose its price vigor. At the same time, many steel mills have pulled up steel prices by more than 30 yuan. In the weak market, prices have fallen again under high inventory risks, and prices have been inverted. These factors have caused the market to lose its price vigor. In the trend that the market demand is weak and the market is difficult to change this year, even if the recent North China environmental protection has significantly increased the shutdown, the market has lost its price vigor last year, reflecting the slowness and weakness. Moreover, it faces the risk of falling steel prices in April and May, which have appeared many times in history.
This kind of market morbidity is only the steel traders do not panic, do not gamble, in the shipment, reduce inventory, increase the pressure on the steel mills and the adjustment of the price of the market to avoid the risk of a sharp fall in the price of the latter, in order to seize the opportunity of environmental protection and increase the price moderately Maintain a good momentum in this year’s market volatility in the turbulent trend.
At the Liaocheng meeting in Shandong in March this year, I said that steel traders face high inventory and complex market conditions, don’t panic, use shipping opportunities to reduce inventory and reduce market risk. Since the actual winter storage, although the market price is facing high inventory and weak demand pressure, steel traders, with the cooperation of steel mills, have a tenacious game, do not panic and gamble, and use shipments to reduce inventory risks. Avoiding a sharp drop in prices. A small rebound wave dynamic potential also avoids large losses.
Low inventory status will not appear a sharp fall in steel prices, only after the price rises, the deductive price fluctuates slightly, and the new market consumption balance. This shows that lower social inventory is not only a safety barrier for market risks, but also allows the market to seize the opportunity and increase the price. At the same time, due to the current high market price expectations and the weakening of steel demand, the amplitude of the steel market price will fluctuate gradually. However, in the balance of production and demand, low-inventory favorable basic conditions, the steel market price will maintain a small fluctuation trend.
According to the latest data, in the first week of April, steel social inventories fell by 6.5%, and social inventories fell by 1.17 million tons in a single week, the largest decline in 13 years. This week, the total amount of social inventories was 16.802 million tons, the largest decline in a single week in 13 years. The increase in market shipments and the sharp decline in inventories have spurred the market to rebound slightly and the economy has increased in recent days.
Influencing market prices not only has inventory factors, but also market confidence factors. In the current price recovery trend, steel traders should continue to reduce inventory to a reasonable level. After all, weak demand is a big trend. Only a reasonable fall in inventory can reduce market risk and enhance market price vitality. With this market condition, steel traders can calmly cope with the market evolution trend.
From the deeper reasons of market economy relations, steel traders and steel mills are independent market operators. The market steel owner is a steel trader. The price increase, the price loss or the risk loss of the market is the steel trader. After the price increase, the high price advantage is the steel mill, and the low price loss after the price drop is also the steel mill. Steel mills and steel traders have common interests, but the traditional logistics system has no risk sharing and benefit sharing mechanism. There is also no stable market price mechanism power of the modern steel logistics service system. This tells us to go to stock, reducing market risk is the joint responsibility of steel mills and steel traders.
At present, steel traders and steel mills are aware of the importance of lowering social stocks and restoring market price vitality. This goal can be achieved quickly due to the low pressure of excess capacity of steel mills. This trend avoids a deep price drop. Once the inventory has dropped significantly, the market demand is weak and normal, but the basic conditions for market stability are available.
China is in a critical period of economic transformation and development. The slowdown in economic growth is a general trend. In 2018, China’s economic growth target has been adjusted from 6.9% last year to 6.5%. The investment growth rate has only slowly declined at around 8%, and the decline in real estate investment indicates that China’s total steel demand has entered a period of slow decline. This general trend of normalization reflects the normalization of demand and weak trading in the market.
However, due to the strong production capacity in 2017, the utilization rate of steel equipment has exceeded 80%, far higher than the level of industrial countries in the world. Without the pressure of severe overcapacity, steel mills will not interpret the excessive price competition of steel mills in previous years in order to maintain reasonable profits. It is possible to control the output and maintain the balance of supply and demand of market resources. This provides a basic support for the stable operation of the price in a reasonable range.
As for the iron ore price trend, I have said many times that the import of iron ore in 2017 was 1.075 billion tons, an increase of 5%. Port stocks exceeded 160 million tons. It is clear that the excess iron ore and high inventory pressure determine that the iron ore market price in 2018 can only be moved according to the steel price. As long as steel prices fluctuate steadily, the iron ore market will show downward pressure, so there will be no upward thrust on steel market prices. As for the Sino-US trade war analyzed from the previous point, it can be concluded that no matter how the future is interpreted, negotiation is the way to solve the problem and will not have a big impact on the steel market.
In 2018, China has significantly increased its efforts in environmental protection. The 15 urban steel enterprises in Hebei Province completed the relocation or all shutdowns before 2020! The province’s removal capacity exceeded 100 million tons, and the peak-to-peak production limit was not reduced. Only Wu’an reduced its production by 50%. Under the pressure of environmental protection, the production capacity of 30 million tons of pressure will bring opportunities to the market. This also determines the good trend that the market price will enter a steady volatility after the steel market has adjusted the major relationship in the current bottom market this year.
In response to this general trend, it is recommended that steel mills still insist on controlling production and maintaining the balance of production and demand of market resources. Steel traders should also grasp the control of reducing the total inventory, which is conducive to maintaining a limited degree of prosperity in the price increase of this wave of steel market. Prevent new market risks due to increased shipping pressure. The focus of today is on the market situation and the future price trend of the steel market. However, I used a longer content to talk about the transformation and development of enterprises related to market conditions and price trends. In fact, this is also the complexity of the current steel market situation. In fact, the transformation and development pressures and risks faced by steel mills and steel traders are far greater than the risks of future steel market price trends. Not only that, but how to solve the deep-seated contradictions under the pressure of transformation is actually related to the fate of steel traders, directly or indirectly affecting the relationship between market supply and demand and price stability. To understand these influences, we can control the market trend. In fact, this is also the complexity of the current steel market situation.
It is believed that steel mills and steel traders have the wisdom to take advantage of the future market and maintain the industry’s hard-earned and reasonable profits. Co-creation of the normalization trend of the steel market price in 2018 fluctuating in the region of reasonable profit in the industry.
7. The United States has raised the import tariffs on steel to make the world trade war face a severe situation, which will have a negative impact on the world economy, but it will not stop the development pattern of the world’s open trade.
The steel trade war provoked by the United States once shocked the world, but in less than two months, the US trade war policy offensive has experienced a war of steel trade, global opposition, and shaken the alliance of the United States; The Chinese trade war was attacked by China and the US market was in panic. The stock market fell sharply. From the economic structure, the root cause of the US trade deficit shows the weakness of the US economy. Although the new $100 billion taxation seems to have intensified Sino-US trade confrontation, it also shows the frenzied side of the decline of American hegemony. However, the unfavorable situation of misjudging the situation and the panic in the US market will eventually lead the two sides to enter the stage of negotiating and resolving trade disputes.
Grasp a few basic points:
1. The trend of the world economic structure and the decline of the US dollar hegemony. The domestic manufacturing industry is shrinking, ahead of consumption, trade deficit, and the 20 trillion US dollar debt is difficult to grow, which makes the United States face great pressure and a sense of crisis. The big trend of the United States cannot change. To solve the US trade deficit, we can only find a way out of domestic policies.
2. The economic rise of China and the Belt and Road countries is a major trend. It is the driving force for the world economy. Western countries can only integrate this torrent to expand their development space for their own economies. Germany’s former foreign account Fisher said that Europe’s avoidance of sinking is very clear. But the game between the two old and new world economic order, although ultimately integrated development, establishes a global governance system. However, the development process, especially the Western hegemony and the old order game represented by the United States, will not easily withdraw from the historical arena.
3. The rise of China is the mainstay of the new order. It is inevitable that the United States will suppress and contain China. The trade war provoked by the United States is directed at China. You can’t hide. But he has two qualities. There is a crazy game side, and there is also a side that has been pained and has to seek a negotiated settlement.
4. It can be seen from the steel trade war that the Western hegemonic system has been torn down, but it has no great influence on the economic rise of the Belt and Road. Only the consensus and strength to mobilize the world against trade wars. It is precisely the structural differences between China and the United States that have determined that the United States is not hurting China. There is no winner in the trade war. It should be said that both suffer losses. But the United States has lost even worse. China and the forces that represent the new world economic order will certainly win this trade war. From the US stock market crash, the market panic, and opposition, it is clear that the United States does not have the capital power to fight trade.
5. The impact of the trade war on the world economy is negative. China’s opposition to the trade war represents the power of the world’s new economic order. It is the advance of history. We must put this big pattern into the Sino-US trade war. The trade war launched by the United States is completely different from the economic background of the 1930s. It is a trade war with no winners only between Western industrial countries. The Great Depression led to the Second World War. But now that the times have changed, the United States has no power at all to challenge the power of the economic rise of developing countries. Time, place, and nothing, the United States does not lose, although lost. This is the game of the new era, the power of the new pattern and the interests of the US hegemony. We are forced to resolutely win the Sino-US trade war and hurt the paper tigers in order to fight for the correct future of trade disputes. This is in line with the historical trend.
6. In the face of unwillingly declining American hegemonism, unite with struggle for unity, unite with compromise, and unite and die. After several rounds of contests, Trump said that President Xi is always a good friend and can see that the future of the negotiations exists. The impact on the steel market will not be large. Grasping these views, the evolution of the Sino-US trade war can control it.
Trump is determined to fight the trade war for a long time. The US financial hegemony and the international currency status of the US dollar for decades have enabled the United States to vigorously develop its financial derivatives industry, draw on world wealth, and create an American-style prosperity in which manufacturing shrinks and low-savings are ahead of consumption. The shrinking of the US steel industry is caused by domestic factors such as the decline in steel production demand and the high cost after saturation. For a long time, US imports have also shown a large deficit. However, with the economic rise of developing countries, with the internationalization trend of multinational currency regional trade such as the renminbi, the reliance on dollar hegemony to gain the world’s wealth path has become narrower and narrower. More than 20 trillion US dollars of debt is difficult to continue to grow. Is this year’s ultra-trillion dollar government deficit sustainable? This has added to the sense of crisis in the United States. Trump is determined not to be wrong to restore the US manufacturing industry and reduce the trade deficit. However, he focused on the trade warfare rather than attracting international investment and developing international cooperative operations. The United States is a big country and a strong country. If you take the right path in the international arena, you can let the American flag fly in the wind. However, American politicians do not follow the right path. They can only follow the path of picking and failing and then picking the way down the old road of failure. After all, the international environment including China has undergone major changes.
Affected by the increase in domestic infrastructure investment, US steel production in 2016 is approaching 78 million tons. 2017 and 2018 will grow at a rate of more than 5% with a target of more than 90 million tons. In 2017, the United States imported a total of 38.10 million tons of steel. Mainly from South Korea, Canada, Turkey, Japan, Germany. In 2016, China exported 1.18 million tons of steel directly to the United States. In 2017, exports to the United States continued to fall. On March 1 this year, the United States plans to impose a 25% tariff on imports of imported steel and aluminum products. In signing the decree, Trump said that increasing import tariffs is beneficial to the US steel industry. At the same time, the Trump administration is also preparing to significantly increase tariffs on car imports. Live off a US priority, trade protection, ignoring the face of international openness, fair trade principles and order. This is naturally subject to fierce opposition from South Korea, Canada and Europe, and they are preparing to counter it. The trade war is in the midst of a major Western industrial country. Many countries, including China, are already preparing to increase import tariffs on US exports in accordance with the principle of equal benefit. The end of the trade war is both loses. This will inevitably deepen the rift of the Western hegemonic system led by the United States. Adding negative pressure to the development of the world economy. It also increases the cost of manufacturing in the United States. Recently, US steel suppliers have announced a price increase of 20-30%. The WTO is openly opposed to the US trade war. Economic adviser Cohen resigned is not wanting to take this historical responsibility.
According to reports, China’s steel exports account for only 2% of the total US imports of 38.1 million tons. From the perspective of the steel market, we raise this issue only to pay attention to the negative impact of US trade protection and the provocation of trade wars on international steel trade and the world economy. The trade protection of the United States has made people see what the hegemonism is saying to maintain the world order. In particular, it affects the deep-processed product substrates such as cold-rolled coils and galvanized sheets that are indirectly exported to Southeast Asia. But the steel demand already generated by the world is always supplemented by trade pattern adjustments. The evolution of the international economic landscape and the rising trend of the Belt and Road economy will not reverse, and will continue to provide opportunities for Chinese enterprises to export steel.
At the same time, we cannot underestimate the impact of Trump’s tax reduction policy on Chinese exports. The US government reduced the corporate tax to 20%, close to the European level. This will reduce the burden on enterprises and greatly increase the export competitiveness of US corporate products. This in itself reflects the international development trend of the influence of corporate tax burden on the competition of enterprise product market at different stages of development. It also increased market pressure for the Chinese government to reform large government institutions, transform government functions, and reduce government expenditures.
The changing trend of the world economy and the transformation and development of China’s economy have undergone profound changes with obvious characteristics of the times. This change in the situation will also have a profound impact on the future steel market. The new trend of changes in the world economic structure will be the greatest practice of human society in the 21st century. It will definitely have a profound impact on the Chinese steel industry. If the 21st century, which was put forward at the China-Africa Steel Forum held by the Chinese Academy of Social Sciences nine years ago, is the era of economic rise in developing countries. Today, people clearly see: First, the strong economic development of China has profoundly affected the economies of the world. Second, the implementation of the strategy of the Belt and Road Initiative has promoted the integration of the Chinese economy and the strategic approach of the Belt and Road, and also attracted European countries to expand cooperation with the Belt and Road economy. The German Foreign Minister said that Europe does not want to sink into it. It only cooperates with China to develop the Belt and Road, and creates conditions for European economic development from a larger space. This has already formed a powerful driving force to lead the new pattern of world economic development in practice. It is the megatrends of economic cooperation in developing countries and the power of the new order that have made the world order and hegemony established by Western industrial development in line with Western interests undergoing a storm in the system. Obviously, all of this is an inevitable trend in the evolution of the deep-seated contradictions in the world political economy brought about by the new pattern of economic rise in developing countries. This trend is in line with historical trends and is a good thing. There is a long way to go, and time is obviously beneficial to the peaceful development of China and the countries of the world.
This era of background is different from the trade war that has occurred in history, and finally evolved into economic depression and war. Now that the environmental conditions have changed, the world and the international trade organizations have opposed the United States to provoke a trade war, and even domestic opposition. In the trade war, the United States does not occupy the time, place, and people. In the economic structure of China and the United States, if the trade war is waged, the United States will lose even more. The United States can raise its own trade threshold, and the general trend of not changing the trend of international steel prices can not stop the development pattern of the world’s open trade, and it is inevitable to raise its own feet.
It has only been more than a month since Trump initiated the steel import taxation trade war. It is said that the “epic-like Sino-US trade war” situation in my WeChat circle of friends Mei Xinyu has caused a fundamental change that is not conducive to the United States.
When Trump’s steel and aluminum import trade taxation was introduced, it caused a panic in the cabinet market, and the stock market, futures, and commodity prices plummeted. In just two days at the end of March, the US stock market dipped 1.8 trillion US dollars. US technology giant Amazon lost $57.6 billion. The panic in the United States far exceeds that of other countries, and it also exposes the weakness of the US economy. At this time, China’s stock market has rebounded sharply, even close to the level before Trump announced the steel trade war.
When the US steel trade war came out, it was opposed by the EU and the WTO. The EU has proposed a list of reciprocal measures against trade with the United States. The voice of the world’s opposition to the Trump steel trade war, including the United States, made American politicians unexpected. Shortly after the United States negotiated immunity with Canada and Peru, it reached an agreement with South Korea on the revision of the bilateral free trade agreement and reached an agreement. Under the new trade agreement, South Korea has lowered the threshold for US auto access, and the upper limit for US automakers to export to South Korea has more than doubled. At present, only the South Korean family has made compromises. However, the development of the situation made the Koreans regret very much, saying that they betrayed the national interest.
After the United States increased some state immunity, the Trump administration also thrown a tariff on China’s $50 billion imported products, and finally pointed its finger at China. Even the target is directed at the four strategic areas that China is advancing toward the manufacturing powers of 2025. Faced with this complicated international situation, in the face of the conspiracy of the US government’s guilty guilt, the Chinese government can only make the United States lose even more by relying on the international trend and opposing the US trade war. The Notice of the Ministry of Commerce on Public Consultation on 232 Measures for Imports of Steel and Aluminum Products in the United States and Chinese Countermeasures, intends to suspend tariff reductions on 128 imported products in the United States. At the same time, it has formulated a plan to deal with the US trade war. Simply reducing soybeans, aircraft and car imports will make the United States unhappy, there is no chance of winning. 6% of Apple’s mobile phone value chain is assembled in China, and Airbus aircraft raw materials come from Europe and Japan. China has provided a huge market, but the materials are mainly from Europe and the United States. Once the trade war begins, the main damage is Europe and the United States.
In order to fight against China, Trump publicly asked European allies to “stand the team.” The trade war between Europe and the United States will directly collapse the US hegemonic system. The Europeans seem to see the true intention behind the US trade war, ease the direct confrontation with the US trade war, and seem to also express cooperation with the United States. This can be seen from the fact that a dozen or so mainly European countries have to reduce the Russian embassy personnel. The complexity of the battle. The aim is to strive for a US exemption for the country. But the purpose of the United States is to win over the EU’s trade war with China, which is also a complex trend of future trade wars.
On April 3, the website of the US Trade Representative Office released a list of imported products from China based on the so-called 301 survey, which proposed to add tariffs. The list contains about 1,300 independent tariff items worth about $50 billion, involving aerospace, information and communications. Industries such as technology, robotics and machinery. The US Trade Representative Office recommends an additional 25% tariff on Chinese products on the list. This measure by the United States clearly violates the relevant rules of the World Trade Organization, seriously infringes on the legitimate rights and interests of the Chinese side under the rules of the World Trade Organization, and threatens China’s economic interests and security.
In order to defend China’s legitimate rights and interests in violation of international obligations caused by the United States, the Chinese government will, based on the “Foreign Trade Law of the People’s Republic of China” and other basic laws and principles, will produce agricultural products and automobiles that are native to the United States. Imports of chemical products, such as chemical products and aircraft, are subject to tariff increase measures, with a tax rate of 25%. In 2017, China imported about US$50 billion from the United States. There is still a two-month negotiation buffer period for the US-made war against China. Recently, the United States has proposed to export large quantities of natural gas to China as a condition for exempting China. This kind of conspiracy to separate Sino-Russian relations has been seen by the Chinese people. Trade frictions and conspiracy are continuing.
Today, there is no winner in the trade war. It should be said that both sides of the trade war will have losses. Nobel Laureate Krugman: Trump will be a ignorant trade war winner can only be China. Trump’s trade war will quickly become a living textbook, allowing the Trump authorities to neither influence others nor lose friends. The fact is that the trade war is a big bad thing. In the end, almost all relevant parties will suffer economic losses. If we must say that the trade war can produce a “winner,” it can only be those countries that have gained greater geopolitical influence because of the US self-defeating reputation. From this perspective, the Trump trade war is indeed a candidate for the winner, that is China. No wonder American experts say that the trade war has confirmed the failure of global management in the United States.
The economic rise of China and the Belt and Road countries has changed and continues to dominate the changing trend of the world economic structure. This is the most important background difference between today’s trade war and the trade war between Western industrial countries in the 1930s. The decline of American hegemony, the social political situation in Europe, the United States spent $7 trillion to create a Middle East chaos that has evolved toward the fate of the victim country. The collision between the old and the new world order has deeply impressed the United States and the West. pressure. This is the United States that has provoked a trade war and hopes to gain the root cause of the US economy through intimidation. However, it underestimated the power of the world economic pattern and the trend of the economic rise of developing countries, misjudged the situation, stubbornly adhered to the US’s priority hegemonism, and was able to move its own feet.
The strategic goal of the US Wei Association’s North Korea is to suppress China. Drawing on Libya and Iraq’s lesson, North Korea must be tough on the United States, especially if it has a nuclear bomb to avoid the US bombing. The nuclear peninsula is not conducive to the security of China and the peninsula, which has led to tensions on the peninsula. But the Chinese bottom line does not allow the peninsula to be in chaos and fight. This is in the interest of the peninsula. It is not difficult to see that although China and North Korea have different policies, they all have the same goal of opposing the threat of US-made war and defending common interests. It is to fight against common enemies from different battlefields. The situation on the peninsula has undergone major changes. In particular, the DPRK finally recognized the reconciliation, and the inherent trend of peace on the peninsula was obvious. Therefore, I said that China, the DPRK and the Korean Peninsula will continue to become mainstream. It is also for this reason that the fundamental real side of China-DPRK relations has finally surfaced. This is the picture to watch. It is possible to directly play the role of a big power and promote the reconciliation between the DPRK and the Korean people, so that the peace of the peninsula can be reduced by the United States. The DPRK also promised to abandon the nuclear. The world has heard it. As long as China and Russia come forward to directly maintain the DPRK and South Korea, and open up the road to peace on the independent peninsula, the US occupying forces will roll early. Here we talked about the new changes in the situation on the Korean Peninsula, which have little to do with the trade war. But from the two world order game trends, the United States will not be willing to decline the hegemonism, which makes us not only look at the general trend. After clearing the new changes in the situation on the Korean Peninsula, the United States will create new contradictions. This also makes it clearer that the United States in a dilemma has provoked an inevitable trend in the Sino-US trade war. This is not China’s willingness or unwillingness. Since it is a trade war against China provoked by the United States, China cannot hide. It can only be used as a breakthrough in the strategic game of the two world order strategies. There is no choice but to win this Sino-US trade defense war from the national strategy and from the game of the two world orders.
For the iron man, it is necessary to see that the United States will not give up the traditional hegemonic politics. The game between the old and the new world order determines the complexity of the future evolution of the Sino-US trade war. We just wait and see. But what is important is that there is no need to worry about the trade war provoked by the United States. The rise of investment economy in developing countries has a 4% demand growth trend for steel. China’s steel exports to the US are only less than 1 million tons. These factors determine that the trade war will not have a big impact on the trend of the Chinese steel market.
At the same time, we must see the duality of American politics. This also determines that the United States is equally dual in the trade war. Enhance the self-confidence of the Chinese, grasp the favorable trend of the international opposition to the US to provoke a trade war, support the government’s determination to provoke the trade war with the United States, and believe that the government’s countermeasures can win this epic trade war. China will pay some price, but the United States will certainly lose even worse. This is not necessarily a new development opportunity for China to deepen reform and expand opening up.
In response to the US 301 investigation’s trade war on China’s export of US products to increase tariffs by 25%, China announced a $50 billion trade counter-measure on the second day, and counter-measures hit the United States. The United States has provoked a trade war, and the international community and various sectors of the United States have opposed it. Let the US government get into trouble. From the US president, economic adviser, and business minister, they all explained that there is no trade war between China and the United States, and negotiations can solve the friction between China and the United States. This process also shows the world that China’s economic volume and trade policies are the mainstay of maintaining the world trade order.
Of course, I also believe that the government will handle the Sino-US trade frictions in the principle of open trade, equal consultation, mutual benefit and win-win, and do a good job of negotiating and resolving the future of trade friction. Forcing the US government to abandon the US priority in handling international relations and to integrate into the world trend of openness, fairness, and win-win trade. This must be China’s great contribution to the international community. But at this point, it must be clear that the pain of the decline of hegemony has also made the United States more frenzied in suppressing China’s rise. Recently, Trump has to start a $100 billion commodity to impose tariffs to increase bargaining chips. Calling on Latin America to develop trade with the United States instead of China, and wooing the EU to prosecute China to the international trade organization, both illustrate the complexity of Sino-US trade frictions, and must be recognized in the overall situation of the two world order games in the new pattern of world economic development. The complexity and evolutionary trend of Sino-US trade disputes.
The United States engages in trade wars and suppresses China, but when it comes to time and place, people and it don’t take up. The times have changed and can only be lost. The United States wants to fight, and China will accompany it to the end. It is said that there is no winner in the trade war. It is suitable for the 1930s. If it is not suitable for today, it should be said that there is a loss in the trade war, but there is indeed a victory or defeat. Recently, Lang Pu said that the chairman of the class is always a friend. It seems that the opposition at home and abroad is endless, especially in the US market panic, the trade war has not yet started, the stock market has plummeted, and the tragedy has made Trump understand something. . This indicates that in the future, it is also possible to reach a negotiated solution with China in the midst of a failure. At that time, China would increase its import from the United States and give the United States a step up. After all, the trade war is different from a war of aggression. It is necessary to force the United States to abandon its hegemonic thinking and integrate it into the world trend to build the United States.
Source: China Alloy Steel Pipes Manufacturer – Yaang Pipe Industry Co., Limited (www.steeljrv.com)
(Yaang Pipe Industry is a leading manufacturer and supplier of nickel alloy and stainless steel products, including Super Duplex Stainless Steel Flanges, Stainless Steel Flanges, Stainless Steel Pipe Fittings, Stainless Steel Pipe. Yaang products are widely used in Shipbuilding, Nuclear power, Marine engineering, Petroleum, Chemical, Mining, Sewage treatment, Natural gas and Pressure vessels and other industries.)
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