the National Development and Reform Commission held restrain industry overcapacity and redundant construction conference, the steel industry overcapacity ranks to become the first major industry, why is the old problem of a few years ago are now more serious? The more stressed the more capacity, structure, the more stressed the more chaotic, the problem becomes clearer and more Where is the reasons?

The analysis that the steel industry overcapacity and approval, finance, environmental protection, quality, resources, five "threshold" exists in name only has a direct relationship, which is not really play a role in the five thresholds are the reasons behind China's iron and steel industry, the long-term presence within the four major errors: structural adjustment to a simple improvement "strip ratio" look out behind the level of equipment, the joint reorganization of the bigger the better, the lack of scientific prediction of excess production capacity.

Four errors did not clarify

2005 iron and steel industry policy has been for four years, and for now has been with the current practice of iron and steel industry development uncoordinated, but the policy has generated misleading.

Industrial policy blindly emphasized "plate-tube than" led to "obedient" to swarm on a large steel plate project, plus look out behind the standard converter the size of the blast furnace and direct short-term production capacity brought about the rapid expansion of hot-rolled to form a serious surplus production capacity, there a long time "high-value" the price of hot-selling volumes, but low value-added of the rebar (4385,2.00,0.05%), wire (3824,9.00,0.24%). Standard also brought out behind a consequence, large and small blast furnace steel mills are large desperate big converter, afraid to place orders be eliminated. In fact a large number of steel is entirely possible through technology upgrades, and improving environmental standards for their development, rather than simply on the expansion project can be. Fortunately, at present, public letter to the Ministry has recognized this problem, started to make some policy changes.

"Joint Reorganization bigger is better" has become a policy-oriented, in fact, there are questions about the scientific nature of this formulation. It ignores the enterprise survival and development of ecological environment and the marginal effect, in violation of the law of the market economy. Appears excessive government intervention in business, or even to force businesses to reach 10 million tons or 100 million tons target.

"How much excess capacity in the end?" From the late 90 century, began to control iron and steel production capacity up to now, we have been mentioning the steel overcapacity. 300 million tons of crude steel production in excess of 400 million tons of surplus, 600 million tons of surplus, 700 million tons of excess, but not an authoritative department reached a conclusion: China's steel demand in the end how much? Where is the peak? Trough where? Including the current public opinion generally made by 660 million tons production capacity there is 100 million tons of excess capacity, there has not been scientific proof and prediction?

Excess capacity is a fact, but the number of excess? Where surplus value is reasonable? When the supply-demand relationship will change? This issue requires careful study by authoritative departments, scientific decision-making, can not simply be generalized. Otherwise, according to the 300 million tons of excess regulatory policy, China's current steel prices had already fly overhead.

Five threshold is difficult, as

In the above-mentioned problem-oriented misreading the context of iron and steel industry, controlling the threshold of production capacity in order to truly play a role very difficult. Of course, there are other reasons at work.

Theoretical expansion of steel production capacity, resources, funds should favor high-tech high value-added projects, but in reality the implementation of already-aliasing.

Iron and steel production capacity to expand, first off is the processing part, but we are seriously lagging behind in the processing time of the actual needs of enterprise development, until approval down when a new economic cycle again, and businesses can not afford, only secretly launched, engage in "fait accompli." Private steel mills to do so, the state-owned steel mills have followed suit. Therefore, the examination and approval links can not prevent the iron and steel projects launched chaos.

Project through the approval, the banks will loan; virtually no approval of the project, the banks will loan the new projects launched with much related to GDP, local governments will naturally be strongly supported. So, this year's record crude steel production stack, inventory remains high, that is, no one cut, why? Backed by a bank, steel mills with plenty of cash flow, can hold on. In this context, much less what a local environmental protection departments will risk offending "parent-like", off his official status of the risk, to monitor the clean production of iron and steel enterprises.

Threshold depends on the quality of policy standards, but the vast majority of China's steel products are low-end products to improve the threshold there is a gradual process. The water, electricity, mining and other resource allocation is basically dominated by the local governments, the local iron and steel enterprises have no doubt that there are geographical advantages.

The five threshold, in fact environmental protection, quality threshold should be subject to regulation by the government, but the project's approval, the use of funds and resources should be the integration of market behavior, but the Government's awareness of policy makers in the administration of thinking has not changed over, a step, but This "threshold."