In recent years, driven by the rapid growth of China's steel production, the metallurgical roll manufacturing industry has achieved rapid development. From the situation in the first half of this year, some large-scale roll manufacturing enterprises with strong capabilities have been unable to meet the full needs of key customers even if they are operating at full capacity. Some of the contracts signed this year must be carried forward to the next year.
Industry experts pointed out that although the market situation is good, it does not mean that there is no problem in China's rolling industry, especially in the first 8 months of this year, raw material prices have skyrocketed, production costs have increased dramatically, capital shortages, market competition is not standardized, and product structure is not Reasonable new and old contradictions are highlighted, and it is imperative for roll manufacturers to break through high-cost extrusion efforts as soon as possible to maintain the sustained and healthy development of the industry.
The decline in efficiency is facing a variety of pressure on companies
In the first half of this year, the metallurgical roll manufacturing industry continued to maintain rapid growth. Leading companies in the industry—Sinosteel Group Xingtai Machinery Roll Co., Ltd.'s output value, output, sales revenue, profits and taxes compared to the same period last year, the growth rate still maintained a level of nearly 40%. However, behind the increase in the production and sales of products, the economic benefits of enterprises have not been “higher and higherâ€, but have shown a sharp decline. The main reason is that the prices of pig iron, scrap steel, various ferroalloys, and coal, oil, and electricity, which are required for roll production, have continued to rise sharply and have swallowed corporate profits.
According to relevant data, cast iron was 2800 yuan/ton last year, and it is now close to 6,000 yuan/ton. Scrap has grown from 2,300 yuan/ton last year to 4,000 yuan/ton now, and the ferro-vanadium price has doubled from last year; The double increase in coal prices, the increase in electricity and oil prices, and the increase in transportation costs, only a few of these, the cost per ton of roll products will increase by 2,000 yuan. According to the introduction of Xingtai executives in China Steel, the company’s annual cost is expected to increase by more than 300 million yuan over the previous year.
In the first half of the year, China Steel Xingtai Machinery Co., Ltd., whose product output value exceeds RMB 1.5 billion, has been completed. Because there are incomparable output scales and market scales for many enterprises in the industry, we can use the advantages of scale efficiency and product structure to absorb some of the price increase factors. For small and medium-sized roll companies with small scale, poor equipment, low technology, and uncompetitive products, apart from the rapid rise in raw materials and energy prices, and the difficulty in selling low-grade roll products, it is difficult to sell a good price. There are many kinds of pressures such as increased energy conservation and emission reduction supervision, rising labor costs, and tight bank loans. This is indeed aggravated, further exacerbating the degree of difficulty, and some have reached a point where it is difficult to survive.
A variety of "internal injuries" troubled companies
In addition to the challenges faced by macroeconomic uncertainties, the roll manufacturing companies also have their own ability to cope with challenges.
The first is small scale. In the domestic roll industry, the number of enterprises producing hundreds of tons and thousands of tons of rolls each year accounted for more than 80%. The combined production capacity of hundreds of small roll mills also failed to match that of a Sinosteel Xingtai. Due to the small scale, the fixed cost is not high, but the cost of variable cost and unit cost is still high. With the roll manufacturing entering the high cost era, the scale will not increase, the cost will not drop, and the bargaining power will not be strong. The loss situation of many small roll mills will become more serious.
The second is poor equipment. The same is the molten iron smelting equipment, 3 tons of industrial frequency furnace compared with 20 tons of industrial frequency furnace, the energy consumption of tons of hot metal to be a difference of 3 times. Due to the small scale of investment in many small roll mills and the lack of large-scale equipment, it not only fails to produce large-scale high-end rolls that are in short supply, but also faces high energy consumption and high pollution, and faces enormous pressure for energy conservation and emission reduction.
The third is backward technology. Many small roll mills have inherent shortages, resulting in poor innovation capability. There are generally no scientific research institutions and new product development methods. They are keen on “market followers,†and they are not able to pay attention to basic research on roll materials; they are also manually operated on production techniques. Based on experience, production depends on feelings. Due to the lack of mechanization and automation in the production process, not only can the production process fail to be effectively controlled, but a relatively large number of waste products also result in increased costs and wasted resources.
Fourth, the market order is rather chaotic. In the face of rising prices of iron ore, coke, and other factors of production, steel companies can shift their price increases to downstream companies to offset the impact of rising costs by increasing steel prices. However, under the situation where the supply of roller companies is greater than required in the roll market, lest the company lose its customers and dare not simply “grow upâ€, it can only rely on self-digestion and carry a heavy cost burden on its own. Especially for small and medium-sized enterprises, the product structure tends to converge, resulting in a serious surplus of small, conventional, and low-end roll products, which can only adopt low-price competition strategies. This price war further disrupted the market order and contributed to the deterioration of non-standard competition and the living environment.
Fifth, there is a shortage of funds. Most of the rolling company's liquidity comes from bank loans and product advances. At present, bank loans are constrained, and it is difficult for the market's surplus low-end rollers to get advance payment. The production cycle of the rolls is long, and the products are occupied with a large amount of funds. However, after the sale of the funds, there must be a period of payment and payment. In particular, the rolling steel enterprises are also faced with increased costs and shortage of funds, resulting in the recovery of accounts receivable. Lag. According to the order of the production of roller companies, the contract can be cashed to get the purchase price, the purchase of raw materials but have to pay cash, which caused a lot of cash in the production and operation process for a long time to stay, so that some of the strength of the small and medium-sized roll mill is likely to be The cash flow breaks and exits the market.
Innovate and improve power
Everything is developing in the process of discovering contradictions and resolving contradictions. In view of the current severe economic environment and continuously increasing high cost pressures, digesting a new round of price increase factors has become a common issue for the roller companies, and has also further enhanced their motivation for innovation and improvement and improved profitability. It is understood that at present, roller companies generally adopt internal measures to tap potentials:
The first is to manage potentials. Through the implementation of intensive management, lean production, and unimpeded assembly line operations, it reduces inactive labor time, reduces the idle rate of machine tool equipment, and improves production efficiency in effective working hours. The second is to strengthen overall budget management and cost control and reduce non-productive expenses. Starting from the details, some savings, and strengthen the strict assessment, reduce the cost of various costs. The third is to improve technological processes, focus on lowering production costs, increasing production efficiency and product quality, setting up research projects, carrying out technological and technological innovations, and strengthening energy-saving measures; finding gaps in various production processes and links, and conducting uncontrolled process control points. Combine and standardize, promote energy conservation and consumption reduction. The fourth is to accelerate independent innovation and technological progress, optimize product structure, develop high-tech, high-quality, high-value-added products, and eliminate backward products with low output value and high consumption. The fifth is to avoid the vicious competition and price war in the domestic roll market, and use the export-related policies for mechanical and electrical products to actively develop foreign markets. It is reported that Sinosteel Xingji has signed an order for export contracts of nearly 100 million U.S. dollars this year. The export volume of non-dominant products has exceeded 10 million U.S. dollars, which has not only effectively increased the scientific and technological content of such small and medium-sized roller products, but has also passed the inspection of advanced foreign standards, and has also promoted the improvement of the overall quality of the enterprise and its internationalization. Construction.
In addition, the sharp rise in the new round of production costs has played an active role in effectively curbing low-level redundant construction, accelerating the elimination of backward production capacity, and promoting energy conservation and emission reduction in the process of promoting the polarization of the domestic roll industry. The “small, scattered, poor, and chaotic†situation of the roller industry has created favorable conditions for industrial restructuring and improvement of economies of scale. The advantageous enterprises in the industry, such as Sinosteel Xingtai, should seize this opportunity to adapt to the development trend of the joint reorganization of the steel industry, give full play to the industry-led and market-leading role, through the integration of resources, strong alliances, and make special efforts to make the company bigger and stronger. Do it well.
Industry experts pointed out that although the market situation is good, it does not mean that there is no problem in China's rolling industry, especially in the first 8 months of this year, raw material prices have skyrocketed, production costs have increased dramatically, capital shortages, market competition is not standardized, and product structure is not Reasonable new and old contradictions are highlighted, and it is imperative for roll manufacturers to break through high-cost extrusion efforts as soon as possible to maintain the sustained and healthy development of the industry.
The decline in efficiency is facing a variety of pressure on companies
In the first half of this year, the metallurgical roll manufacturing industry continued to maintain rapid growth. Leading companies in the industry—Sinosteel Group Xingtai Machinery Roll Co., Ltd.'s output value, output, sales revenue, profits and taxes compared to the same period last year, the growth rate still maintained a level of nearly 40%. However, behind the increase in the production and sales of products, the economic benefits of enterprises have not been “higher and higherâ€, but have shown a sharp decline. The main reason is that the prices of pig iron, scrap steel, various ferroalloys, and coal, oil, and electricity, which are required for roll production, have continued to rise sharply and have swallowed corporate profits.
According to relevant data, cast iron was 2800 yuan/ton last year, and it is now close to 6,000 yuan/ton. Scrap has grown from 2,300 yuan/ton last year to 4,000 yuan/ton now, and the ferro-vanadium price has doubled from last year; The double increase in coal prices, the increase in electricity and oil prices, and the increase in transportation costs, only a few of these, the cost per ton of roll products will increase by 2,000 yuan. According to the introduction of Xingtai executives in China Steel, the company’s annual cost is expected to increase by more than 300 million yuan over the previous year.
In the first half of the year, China Steel Xingtai Machinery Co., Ltd., whose product output value exceeds RMB 1.5 billion, has been completed. Because there are incomparable output scales and market scales for many enterprises in the industry, we can use the advantages of scale efficiency and product structure to absorb some of the price increase factors. For small and medium-sized roll companies with small scale, poor equipment, low technology, and uncompetitive products, apart from the rapid rise in raw materials and energy prices, and the difficulty in selling low-grade roll products, it is difficult to sell a good price. There are many kinds of pressures such as increased energy conservation and emission reduction supervision, rising labor costs, and tight bank loans. This is indeed aggravated, further exacerbating the degree of difficulty, and some have reached a point where it is difficult to survive.
A variety of "internal injuries" troubled companies
In addition to the challenges faced by macroeconomic uncertainties, the roll manufacturing companies also have their own ability to cope with challenges.
The first is small scale. In the domestic roll industry, the number of enterprises producing hundreds of tons and thousands of tons of rolls each year accounted for more than 80%. The combined production capacity of hundreds of small roll mills also failed to match that of a Sinosteel Xingtai. Due to the small scale, the fixed cost is not high, but the cost of variable cost and unit cost is still high. With the roll manufacturing entering the high cost era, the scale will not increase, the cost will not drop, and the bargaining power will not be strong. The loss situation of many small roll mills will become more serious.
The second is poor equipment. The same is the molten iron smelting equipment, 3 tons of industrial frequency furnace compared with 20 tons of industrial frequency furnace, the energy consumption of tons of hot metal to be a difference of 3 times. Due to the small scale of investment in many small roll mills and the lack of large-scale equipment, it not only fails to produce large-scale high-end rolls that are in short supply, but also faces high energy consumption and high pollution, and faces enormous pressure for energy conservation and emission reduction.
The third is backward technology. Many small roll mills have inherent shortages, resulting in poor innovation capability. There are generally no scientific research institutions and new product development methods. They are keen on “market followers,†and they are not able to pay attention to basic research on roll materials; they are also manually operated on production techniques. Based on experience, production depends on feelings. Due to the lack of mechanization and automation in the production process, not only can the production process fail to be effectively controlled, but a relatively large number of waste products also result in increased costs and wasted resources.
Fourth, the market order is rather chaotic. In the face of rising prices of iron ore, coke, and other factors of production, steel companies can shift their price increases to downstream companies to offset the impact of rising costs by increasing steel prices. However, under the situation where the supply of roller companies is greater than required in the roll market, lest the company lose its customers and dare not simply “grow upâ€, it can only rely on self-digestion and carry a heavy cost burden on its own. Especially for small and medium-sized enterprises, the product structure tends to converge, resulting in a serious surplus of small, conventional, and low-end roll products, which can only adopt low-price competition strategies. This price war further disrupted the market order and contributed to the deterioration of non-standard competition and the living environment.
Fifth, there is a shortage of funds. Most of the rolling company's liquidity comes from bank loans and product advances. At present, bank loans are constrained, and it is difficult for the market's surplus low-end rollers to get advance payment. The production cycle of the rolls is long, and the products are occupied with a large amount of funds. However, after the sale of the funds, there must be a period of payment and payment. In particular, the rolling steel enterprises are also faced with increased costs and shortage of funds, resulting in the recovery of accounts receivable. Lag. According to the order of the production of roller companies, the contract can be cashed to get the purchase price, the purchase of raw materials but have to pay cash, which caused a lot of cash in the production and operation process for a long time to stay, so that some of the strength of the small and medium-sized roll mill is likely to be The cash flow breaks and exits the market.
Innovate and improve power
Everything is developing in the process of discovering contradictions and resolving contradictions. In view of the current severe economic environment and continuously increasing high cost pressures, digesting a new round of price increase factors has become a common issue for the roller companies, and has also further enhanced their motivation for innovation and improvement and improved profitability. It is understood that at present, roller companies generally adopt internal measures to tap potentials:
The first is to manage potentials. Through the implementation of intensive management, lean production, and unimpeded assembly line operations, it reduces inactive labor time, reduces the idle rate of machine tool equipment, and improves production efficiency in effective working hours. The second is to strengthen overall budget management and cost control and reduce non-productive expenses. Starting from the details, some savings, and strengthen the strict assessment, reduce the cost of various costs. The third is to improve technological processes, focus on lowering production costs, increasing production efficiency and product quality, setting up research projects, carrying out technological and technological innovations, and strengthening energy-saving measures; finding gaps in various production processes and links, and conducting uncontrolled process control points. Combine and standardize, promote energy conservation and consumption reduction. The fourth is to accelerate independent innovation and technological progress, optimize product structure, develop high-tech, high-quality, high-value-added products, and eliminate backward products with low output value and high consumption. The fifth is to avoid the vicious competition and price war in the domestic roll market, and use the export-related policies for mechanical and electrical products to actively develop foreign markets. It is reported that Sinosteel Xingji has signed an order for export contracts of nearly 100 million U.S. dollars this year. The export volume of non-dominant products has exceeded 10 million U.S. dollars, which has not only effectively increased the scientific and technological content of such small and medium-sized roller products, but has also passed the inspection of advanced foreign standards, and has also promoted the improvement of the overall quality of the enterprise and its internationalization. Construction.
In addition, the sharp rise in the new round of production costs has played an active role in effectively curbing low-level redundant construction, accelerating the elimination of backward production capacity, and promoting energy conservation and emission reduction in the process of promoting the polarization of the domestic roll industry. The “small, scattered, poor, and chaotic†situation of the roller industry has created favorable conditions for industrial restructuring and improvement of economies of scale. The advantageous enterprises in the industry, such as Sinosteel Xingtai, should seize this opportunity to adapt to the development trend of the joint reorganization of the steel industry, give full play to the industry-led and market-leading role, through the integration of resources, strong alliances, and make special efforts to make the company bigger and stronger. Do it well.
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