Steel prices continue to soar special vehicles urgently adjust the price of the automaker or rise?

From the end of 2016 to the beginning of 2017, domestic steel prices have been on the rise, especially after the fires of Bengang Steel and many accidents in domestic steel mills last week, the market has intensified safety inspections and steel mills have focused on overhaul, and short-term supply tends to tighten. Under this influence, the nation’s steel prices have skyrocketed. For example, the price per ton of Shanghai rebar rose from 3150 yuan at the beginning of the year to around 4150 yuan at present, an increase of up to 30%. Sha Steel soared nearly 400 yuan, Zhongtian Iron and Steel, Xing Steel rose 150 yuan, Yonggang, Jinan Steel prices rose nearly 100 yuan. The sharp rise in domestic steel prices has caused a large number of steel companies to turn losses into profits while also bringing different degrees of influence to the automotive industry.

Domestic steel prices continue to soar

According to data from the China Iron and Steel Association, only in the first four months of this year, the total profit of the large and medium-sized steel companies was 30.9 billion yuan, which exceeded the annual total of 30.4 billion yuan in 2016. According to the fundamental situation, the profits of the steel industry in 2017 will reach approximately 90 billion yuan, which will be the third highest point in the total profits and sales revenue of the Chinese steel industry for 25 years.

As early as February of this year, in order to consolidate and resolve production capacity and improve the effective supply of steel products, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Quality Supervision, Inspection and Quarantine, the China Banking Regulatory Commission and the China Securities Regulatory Commission jointly issued the “Notice on Further Implementing the Policy of Maintaining and Maintaining Pressure to Promote the Balanced Operation of the Steel Market”. "Indicating that with the efforts of many parties, there has been a recovering increase in steel prices, and the production and sales of iron and steel enterprises have improved, but recently there has been a problem that steel spot prices and futures market prices have risen rapidly in the short term.

Therefore, the "Notice" pointed out that it will actively support legally compliant companies to strengthen effective supply, guide enterprises to organize production according to market demand, and continuously improve the quality and level of effective supply of steel products, especially construction steel. Encourage steel companies to sign long-term contracts with upstream coal, downstream automobiles, home appliances, and construction steel companies, and establish a stable and honest cooperative relationship. Large-scale steel companies should continue to play an exemplary role. Starting from the interests of the entire industry, they should scientifically determine the ex-factory prices of steel products, actively guide prices within a reasonable range, and play a good role as “wind vanes” and “stabilizers”.

In this regard, industry analysts pointed out that this year's steel prices continue to rise, the steel spot futures market price after the Spring Festival is a sharp jump, the bullish expectations are strong, but from the demand side, the fundamentals did not change. Therefore, the relevant government departments are concerned about repeating the mistake of coal price soaring, thus sending a document to stabilize the market. As the price rises too fast and too fierce, it is out of the support of the fundamentals. Therefore, on the one hand, the policy is to allow steel production capacity to continue, and on the other hand, it is also necessary to prevent the market from resorting to excess speculative steel prices, which will adversely affect the overall economic performance. influences.

However, from the current point of view, the rate of increase of steel prices and the extent of far exceeds estimates. At present, the domestic steel prices have maintained a rapid upward trend. Due to the impact of the production capacity of the steel strips, the market supply has decreased. At the same time, the cost of raw materials for steel products has continued to rise. In addition, some steel mills have overhauled steel products for environmental protection, and steel prices have continued to rise. “A price of one day, the orders to the steel mills can't go down. The original price increase was fifty-five, and now it is one hundred and two hundred,” said Qin Shuguang, a trader from Lecong Steel in Foshan, Guangdong.

In addition, due to the proposal of structural reform on the supply side, the steel industry will continue to increase production capacity and increase the utilization rate of irreversible trends, steel prices will continue to maintain the upward trend. Under the background of the continuous rise in steel prices, combined with environmental pressures, some manufacturing SMEs will face greater pressure for survival.

Will OEMs rise ?

The substantial increase in steel prices will reduce the profits of auto companies. The average steel consumption of a car is about 1 ton, and the price of steel is probably about 5% of the total vehicle cost. According to the classification of whole vehicles and parts and components, the total amount of steel directly used in automobile vehicles accounts for 50% of the total steel consumption in the automotive industry, 15% for modified vehicles, 2% for motorcycles, and 1% for engines. Motorcycle accessories accounted for 32% of the total, and the increase in steel prices has the greatest impact on the entire vehicle and parts industry. Therefore, the rise in steel prices will lead to higher automobile manufacturing costs and squeezed profit margins.

In addition, auto parts suppliers are affected much more than car companies. Since the spare parts supplier's gross profit rate is lower than that of the car maker, and the cost is mostly derived from the raw material, steel, the supplier will passively increase the price of the component parts.

At present, under the soaring steel prices, many parts and components companies and special vehicle manufacturers have adjusted their prices due to rising costs. According to relevant media reports, a number of modified car manufacturers, such as Wuhu CIMC Ruijiang Co., Ltd., Shandong Construction Special Vehicle Co., Ltd., Zhumadian CIMC Huajun Vehicle Co., Ltd., Shiyan Chitian Steel Co., Yangzhou CIMC Tonghua Special Vehicle Co., Ltd., etc., have A notice of price adjustment is urgently issued to vehicle companies and distributors as follows:

Wuhu CIMC Ruijiang Co., Ltd., the lowest model is 2,000 yuan higher, and the highest model is 8,000 yuan. Among them, the prices of powder tank cars and lining plastic tankers have risen by 2,000 yuan, that of mixing tankers by 4,000 yuan, and that of aluminum alloy cans and stainless steel cans by 8,000 yuan.

Shandong Construction Special Vehicles Co., Ltd. notified all regional managers and distributors on August 30, 2017 that all regular semi-trailers had been increased by 3,000 yuan, dump trucks had been increased by 4,000 yuan, tankers had been increased by 5,000 yuan, and carriages had been raised by 8,000 yuan.

The sales price of dump trucks manufactured by Zhumadian Zhongji Huajun Vehicle Co., Ltd. was increased by RMB 2,000.

Dump Truck Upgrading Factory Shiyan City Chitian Steel also adjusted its sales price on August 30, 2017. The conversion fee rose at least RMB 6,000. There are differences in different configurations.

Yangzhou CIMC Tonghua Special Purpose Vehicle Co., Ltd., since August 28, the price of two-axle vehicles for Yangzhou CIMC Tonghua has risen by 2,000 yuan, the price for triaxial trucks has increased by 3,000 yuan, and the tanker has cancelled the filing price. Special orders are discussed separately. .

In addition, the trailer industry also experienced a wave of price increases in August. It is understood that the Liangshan Industrial Park trailer plant has already raised prices collectively. The reasons are the same as those of the above-mentioned enterprises. Both raw materials and supporting prices have skyrocketed and led to a substantial increase in costs.

At the same time, since the concentration of PM2.5 in the Beijing-Tianjin-Hebei region soared by 5.4% year-on-year in the first two months of 2017, the central government set a hard target for air pollution control in the fall and winter of 2017-2018, and requested PM2 in the Jing-Jin-Ji region. .5 The concentration dropped by 15% to 25% year-on-year, and the haze warning day decreased by 10% to 20% year-on-year.

To achieve this goal, the Ministry of Environmental Protection of China issued the “Action Plan for the Comprehensive Prevention and Control of Atmospheric Pollution in the Beijing-Tianjin-Hebei Region and Its Surrounding Areas in the Autumn and Winter of 2017-2018” on August 24 this year. The document requires that the iron and steel coking and foundry industry implement part of peak production. In key cities such as Shijiazhuang, Tangshan, Handan and Anyang, steel production capacity in the heating season is limited by 50% to reduce air pollution and improve the air quality in key cities. The production of crude steel in the Beijing-Tianjin-Hebei region accounts for about 20% of the national total. If the measures in this document are fully implemented, 21 million tons of crude steel production will be affected.

The Hebei Provincial Development and Reform Commission, jointly with the Hebei Provincial Ministry of Industry and Information Technology, recently issued the “Notice on the Results of the Special Monitoring of Product Energy Consumption in the Main Process Units of the Iron and Steel Enterprises of the Province” document, and pointed out that from May 8 to July 15, 2017, Hebei Province In 2016, the energy consumption of sintering, pellets, blast furnaces, and converters in crude steel production in the province's iron and steel enterprises carried out special energy conservation monitoring, and found 18 companies including Baoxin Steel Co., Ltd. and Handan Fengfeng Hengfeng Steel Co., Ltd. Steel companies are either in production or have already withdrawn from production. Tangshan Bainite Iron & Steel (Group) Shunxing Iron & Steel Co., Ltd. and Tangshan Ruifeng Steel (Group) Yuefeng Iron & Steel Co., Ltd. are still two non-compliance companies that are still implementing energy-saving reform to strengthen energy consumption management and are required to be within 6 months. Corrections are in place.

The Yunnan Provincial Security Office announced on September 4 that the “Notice of Yunnan Iron and Steel Industry and the Electrolytic Aluminum Industry to Launch Safety Production Law Enforcement Special Campaign to Promote Backward Production Capacity withdrawing from Work Plan” issued on September 4 required the development of existing normal production steel and electrolytic aluminum enterprises in Yunnan. The special action for safety production law enforcement will result in a wave of backward and non-compliant production capacities for steel and electrolytic aluminum industries.

Under the ever-increasing environmental pressure, steel plants and other heavy industries have become the focus of the Ministry of Environmental Protection's air pollution inspection. With the convening of the Nineteenth National Games, more provinces and cities may continue to increase environmental protection, and the production capacity of related industries may also be affected. The prices of raw materials such as steel are expected to continue to soar.

The rapid rise in steel prices has led to a significant increase in the cost of special vehicle manufacturers and a notification of price increases to dealers. Will the manufacturers of vehicles affected by steel prices also start to adjust prices? This site will continue to pay attention.