"Belt and Road Initiative" drives steel consumption in Northwest China, eliminating excess capacity and keeping pressure.
Gansu is located in the golden section of the Silk Road economic belt and the strategic highland where the country opens to the west. Under the guidance of the "Belt and Road Initiative" strategy, continuously promoting infrastructure construction can effectively promote local steel consumption. In response to the supply-side reform, Gansu Province has reduced the production capacity of pig iron to 1.6 million tons, crude steel to 1.44 million tons and medium (industrial) frequency furnaces to 1.925 million tons. The resolution process has the preservation pressure, vigorously promotes the product transformation and upgrading.
Balanced development of carbon steel and stainless steel
Hongxing of Jiugang has three major production bases of Jiayuguan, Yicheng and Yuzhong, with an annual output of 10 million tons of steel (including 1.2 million tons of stainless steel). Steel prices increased significantly in the first half of 2017, and the gross profit margins of the company's sales of coil, wire, bar, plate and stainless steel were 29.16%, 24.68%, 23.32%, 21.31% and 17.10%, respectively.
Have the advantages of resources and location
Hongxing of Jiuquan Iron and Steel Co., Ltd. is located in the main traffic road, resource concentration zone, with rich own iron ore resources and surrounding ore, coal resources, obvious location advantages. The cost of self-supplied iron ore is low and the cost of self-provided power generation is low, which leads to the cost of hot metal in Hongxing of Jiuquan Iron and Steel Co., Ltd. is about 50-100 yuan / ton lower than that in coastal areas. Hongxing of Jiuquan Iron and Steel Co., Ltd. has a high proportion of its own iron ore, and the company's geographical location has a strong strategic advantage.
There is much room for improvement in the three fees per ton of steel.
The per ton steel cost of Hongxing in Jiuquan Iron and Steel Co., Ltd. is at a high level among the listed iron and steel companies, and there is much room for decline. The company plans to reduce sales costs by strengthening consumption in the surrounding market, diverting some employees and reducing their salaries in the process of eliminating zombie production capacity, gradually restoring production capacity of Yugang, reducing management costs per ton of steel, and reducing asset-liability ratio. improve financial expenses.
High-quality profitable assets are expected to inject new vitality into listed companies.
In addition to the iron and steel plate in Hongxing of Jiuquan Iron and Steel Group, Jiuquan Iron and Steel Group also has high-quality profitable assets such as electrolytic aluminum, electric power and energy, which is a typical "large group and small company". In the context of leverage reduction, the group electrolytic aluminum, power and energy sector high-quality profitable assets are expected to be injected into listed companies, through asset integration to resolve financial pressure.
Risk hint
The demand for steel has fallen sharply.
