Japanese steel mill injured tearing steel demand gap

Although the Japanese earthquake has affected the production of Japanese steel mills, on the other hand, it will be beneficial to the development of the import of alternative products, but only directly benefit the large steel plants with advanced technology in China. The industry believes that although the construction steel such as ordinary thread and high wire has the possibility of expanding exports, the quality is the insurmountable threshold for domestic ordinary building materials. It is the key to improve the quality of domestic steel in the future. The timing of the WISCO and Baosteel price adjustments and the earthquake and tsunami in Japan occurred very delicately. On March 14, WISCO will raise the grade of silicon steel 130 and above by 1,200 yuan/ton, and the price of the oriented silicon steel with the specification of 30Q130 will be RMB 3.8/ton; the Baosteel Co., which seems to have a follow-up trend, will also be in April. Domestic oriented silicon steel rose by 1,000 yuan / ton. Three days ago, Japan, a major exporter of silicon steel, experienced a strong earthquake and tsunami. Analysts believe that the steel company's move is intended to target high-end steel that is imported or will be frustrated. According to He Rongliang, an analyst at the China Merchants Productivity Promotion Center, “The earthquake has affected the production of Japanese steel mills and is also conducive to the development of import substitution.” “The only direct benefit is the large steel mills with advanced technology in China,” said Zhang Lin, a researcher at Lange Steel Information Research Center. Analysts pointed out that improving the quality of domestic steel in the future is the key. Steel gap appears    On March 15, the fifth day of the tsunami earthquake in Japan, Japanese local steel mills are still actively recovering production. The three blast furnaces of the Nippon Steel Plant in Japan have been restarted on March 13th. The Sumitomo Metal Industry Kashima Steel Plant, which had a fire in the coke oven gas equipment after the earthquake, also extinguished the fire on the morning of March 12, but the two blast furnaces were still in a state of suspension after the earthquake. The steel plant of Nippon Steel Co., Ltd. in Kamaishi, Iwate Prefecture, is still in a state of suspension. It is expected that it will take time to rebuild and resume production. According to the “My Steel” network, the steel in the affected area will reduce production by about 22 million tons. "In the short term, the export of some steel products in Japan will be affected." Zhang Lin said. More importantly, "Japan's exports of steel are mainly high-end products." Zhang Lin said. Take Nippon Steel as an example. The company accounts for about 20% of the global high-end steel market. Obviously, the earthquake and tsunami in Japan has torn the gap in high-end steel and increased the opportunities for steel exports from neighboring countries including China. However, only large domestic steel companies that have advanced technology levels will have the confidence to compete for opportunities. The quality of domestic steel has yet to be improved    He Rongliang told reporters that China's silicon steel imports are about 1 million tons per year, of which more than 90% are high-end products with a width greater than 600mm. In recent years, China's steel products have been upgraded rapidly, which has improved the level of steel production in China. “Last year, the output of key steel products such as automotive steel, pipeline steel, silicon steel, ship plate and steel rail has been greatly improved. Among the 22 major steel products, 18 domestic steel products have a domestic market share of over 95%.” Before the China Iron and Steel Association Executive Vice President Luo Bingsheng said at the first China Steel Association conference in 2011. For example, the X80 grade pipeline steel used in the petrochemical industry has basically achieved localization, and successfully produced X120 grade pipeline steel. For example, in the field of silicon steel, high-end capacity construction, the gap is currently narrowing, and the WISCO trisilicon project has reached production, and WISCO has With an annual output of 2 million tons, high-end products such as high magnetic induction oriented silicon steel sheets produced by WISCO and Baosteel are applied to large transformers of 500 kV or above in the Three Gorges Project," said He Rongliang. However, due to the weak competitiveness of domestic steel enterprises in high-end steel, it is difficult to increase the export of high-end products. He Rongliang explained that Japan exported about 43 million tons of steel last year, and steel exports accounted for about 45% of its output. "These are all key imported commodities in China, and there is no import substitution at present." He Rongliang said. At another level, customs statistics show that in the first two months of this year, my steel exports were 5.6 million tons, the export volume was 5.69 billion US dollars, the import was 2.66 million tons, and the import volume was 3.35 billion US dollars. It is not difficult to find out by calculating the average value that the average price of China's steel imports is 1,262 US dollars / ton, and the average export price is 1,016 US dollars / ton. The characteristics of China's imports of high value-added steel and the export of low value-added steel have been exposed. "On the contrary, Japan's future post-disaster reconstruction may be an opportunity for the Chinese building materials market, and the unobtrusive construction steel opportunities are even greater." He Rongliang said. Analysts expect that Japan will not be allowed to impose price limits on building materials during post-disaster reconstruction. According to historical data, Japanese steel mills' construction steel output has been limited, leaving market vacancies. At present, the amount of imported building materials from China accounts for about 40% to 50% of its total imports. In 2010, Japan imported 190,000 tons of wire rod from China, which is the main species imported from China. "The earthquake and tsunami in Japan caused the expansion of the disaster area. It is estimated that the amount of steel needed for post-disaster reconstruction within a few years will not be lower than the estimated value of the Wenchuan earthquake, that is, 37 million tons." He Rongliang said. In Zhang Lin's view, although steel for construction such as ordinary rebar and high-line is expected to expand exports, it is difficult to obtain approval from Japanese importers. After all, Japan has high requirements for the quality of construction materials, and quality has become an insurmountable threshold for ordinary building materials in China.

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