Shipbuilding and machinery industry show signs of recovery

In the first three months of this year, there was almost no decent rebound in the domestic steel market. Under the background of weak economic recovery, steel companies also ushered in a real winter, and their profitability fell further. Only bad companies, no bad industries. As construction steel such as real estate accounts for “half of the country’s steel market demand,” this category of steel companies “covers a lot of sadness” and also covers the “light” of companies that supply steel for subdivided industries throughout the first quarter. Although most of the iron and steel companies' main business are losing money, there are still companies that are making money.

In addition to their own cost control, the product structure of these companies is in line with the demand for steel, or the demand for sub-sectors that are warming up. This is also an important factor for making money. So, where are these segments?

According to Tan Naofen, deputy director of the Information Department of the China Shipbuilding Industry Association, since the beginning of this year, the economic indicators of 54 key shipbuilding enterprises in China have witnessed a significant recovery, with the exception of the 3.97 million dwt shipbuilding completion, which has fallen by 26.3% year-on-year. Achieve substantial growth.

From January to February of this year, except for the completion of the shipbuilding work of 4.14 million dwt, a year-on-year decrease of 27.2%, the other leading economic indicators of China's shipbuilding industry continued to recover, for example, 18.84 million dwt of new ship orders, which was a year-on-year increase of 259%. At the end of February, the number of handheld ship orders was 14,493 million dwt, which was a year-on-year increase of 36.4%, an increase of 10.6% from the end of 2013.

Ship exports also stabilized and recovered. From January to February, the number of completed and exported ships nationwide was 3.65 million dwt, down 25.8% year-on-year; the number of orders for export vessels was 15.87 million dwt, up 307% year-on-year; at the end of February, the number of export ship orders held was 129.99 million dwt, a year-on-year increase of 41.9%.

"China's shipbuilding industry has begun to emerge from its predicament and signs of recovery have been mainly affected by factors such as the bottoming out of the global economy, the implementation of various policies by the state supporting the shipbuilding industry, and the effects of shipowners in increasing the demolition and construction of new vessels. According to analysis by Tan Naofen, the new ship market is expected to remain active in the first half of the year.

As the shipbuilding industry recovers, the demand for shipbuilding steel will also stop falling. Tam Naifen pointed out that according to current handheld orders, the number of ships started in China in 2014 will increase slightly from 2013, and the demand for steel for shipbuilding is expected to be about 13 million tons, of which the demand for shipbuilding plates is about 10 million tons. However, due to the rigid increase in the cost of steel mills and the rebound in demand for steel for ships, the price of marine steel will also stop falling.

At present, the procurement of marine steel is being concentrated in the backbone steel mills, including Chongqing Iron and Steel, Hualing Iron and Steel, Anshan Iron and Steel, Stainless Steel, Shagang, Baosteel and Nangang. In 2013, the output of the top 10 steel mills accounted for 81.5% of the domestic shipboard production. The increase in demand for steel for shipbuilding will also affect the performance of these companies.

In addition to the shipbuilding industry, the machinery industry also started to rise in the beginning of the year. The machinery industry mentioned here mainly includes automobiles, agricultural machinery, internal combustion engines, mechanical basic parts, motors, transmission and distribution products, engineering machinery, machine tools and other industries.

Cai Weici, vice president of the China Federation of Machinery Industry, revealed that from January to February this year, the value-added of the machinery industry increased by 12.7% year-on-year, an average increase of 4.1% over the industry's 8.6%; and the machinery industry's 9% increase over the same period last year. Compared with the same period last year, it increased by 3.7 percentage points. At the same time, the total profit of the machinery industry also increased significantly. From January to February, the total profit realized was 183.3 billion yuan, a year-on-year increase of 29.24%, which was much higher than the 14.43% increase in main income during the same period. Profit from main activities in total profit was 174.9 billion yuan, a year-on-year increase of 12.15%.

Regarding the reasons for the high growth at the beginning of the year, Cai Weici analyzed that the first year was a low base at the beginning of the previous year, so the “year-on-year increase” was easy to rise; the second was the effect of restocking. In the first two years of continuous downturn, the industry-wide inventory has dropped to a relatively low level. Some companies started to start restocking out of response to future expectations. The industry has seen an acceleration of inventory growth since the fourth quarter of last year.

The third is the pulling of the auto industry. In the machinery industry, the automotive industry accounted for as high as 31%, the value-added increase of 15.5% in the January-February period, the main income growth rate of 18.77%, and the total profit growth rate of 36.37%, which stimulated the mechanical industry-wide growth rate; The low price of upstream raw materials has, to a certain extent, contributed to the growth of profits in the machinery industry.

The machinery industry is also a segmented industry with a large demand for steel. In the automotive industry, which accounts for a relatively large proportion in this segmented industry, many automotive steels also rely on imports from abroad. At present, a few domestic steel mills, mainly Baosteel Co., Ltd., Anshan Iron & Steel Co., Ltd., and Wuhan Iron & Steel Co., Ltd., can meet the supply requirements for high-end automotive panels. In June this year, Valin Steel and the world’s largest steel giant, Ansaile Mittal, will also start production. The goal is to meet the growing market demand for China’s growing automotive steel, especially high-end products. Ling thinks it is a hope to get rid of low-value competition in the Chinese steel industry and to “rebirth” through upgrading its technology and service capabilities.

Cai Weici predicted that the profit growth rate of the machinery industry in 2014 is expected to be around 12%, of which the production and sales of automobiles are expected to increase by about 8% over the previous year; the power transmission and transformation equipment and engineering machinery industry will recover; high-end agricultural machinery, high-end machine tools, robots The industry boom of auto lines, petrochemical general equipment and automation meters will be higher than the average level of the industry, while conventional power generation equipment, metallurgical mining equipment, heavy machinery, general machine tools and other industries will remain sluggish.