The recently concluded Central Economic Work Conference, while ensuring growth as the top priority for economic work next year, clearly pointed out: â€œThe general direction of accelerating the transformation of development methods and advancing the strategic adjustment of the economic structure cannot be shaken.â€
Under the dual effects of the severe situation and the central policy signal, as an important industry in China's economic operation, what kind of "cold and warm" steel, automobiles, electric power, and textiles will face in 2009?
Slow recovery in the second half of next year
Industry status: In the second half of this year, due to multiple factors such as the international financial crisis, steel prices dropped sharply and the steel industry suffered a total loss. From October onwards, the central and local policies and projects for the expansion of domestic demand have been intensively introduced, and it is generally acknowledged that the steel industry is strongly favored.
Trend analysis: In the first half of next year, pressure from steel companies remains huge. Steel prices may continue to decline, and the industry welcomes opportunities for consolidation and reorganization.
Authoritative sources and experts point out that the â€œwinterâ€ of the steel industry will not bid farewell with the departure of 2008.
According to data from the Ministry of Industry and Information Technology, China's iron and steel companies currently have 30 million tons of high-priced iron ore in stockpiles and 90 million tons of piles on the dock. Together with those that have not yet been shipped, the total number exceeds 200 million tons. It is expected that the digestion of high-priced raw materials will continue until March next year, and the pressure for losses will continue.
Due to overcapacity and economic slowdown, steel prices may further decline.
A slow recovery is expected in the second half of next year.
On the one hand, the 2009 iron ore cost price is expected to continue to fall, returning to the level of 55 US dollars to 70 US dollars in 2004; on the other hand, the strong national and local investment on the steel demand is likely to show up from the second half of next year. According to preliminary estimates, 4 trillion yuan of investment can drive 150 million tons of steel consumption.
There are nearly 1,000 iron and steel smelting enterprises in China and the concentration is very low. Experts pointed out that in this crisis, the steel industry will form the survival of the fittest and implement the integration and reorganization.
Policy Voice: Minister of Industry and Information Technology Li Yizhong recently stated clearly: â€œIn order to promote the iron and steel industry from becoming stronger, we must provide relevant policies in the context of mergers and acquisitions.â€
According to Zhang Ping, director of the National Development and Reform Commission, next year will focus on strategic adjustment of the economic structure and corporate transformation and upgrading, preparation and organization of the implementation of the steel industry revitalization plan, protection and development of pillar industries, key enterprises, important products and important production capacity.
Auto: Policy effects leave expectations Industry status quo: Affected by multiple factors, the domestic auto industry has shown a significant decline. According to statistics, the year-on-year increase in sales in the first 11 months has fallen by more than 14 percentage points from the same period of last year. In November, domestic passenger car sales fell by more than 10% year-on-year.
Trend analysis: Many people generally believe that the development of the auto industry is not optimistic under the pressure of shrinking residential asset prices and slowing income growth.
The relevant personage of the Development Research Center of the State Council believes that in the first half of next year, the pressure on auto consumption will not be eased quickly. Auto companies should focus on self-protection and strictly control costs and investment plans. However, in the long run, economic decisions to expand domestic demand, as well as more lenient monetary policies, are positive factors for the auto industry.
Experts believe that measures to expand domestic demand include a large amount of infrastructure construction, which will drive demand for transport vehicles and special vehicles for engineering. The reform of refined oil prices and taxes has become a major advantage for the development of small-displacement vehicles. The survey shows that after the implementation of the reform, 40% of consumers will switch to small-displacement vehicles. At the same time, this reform will obviously benefit the development of new energy vehicles and promote the recovery of the auto market.
"Although domestic oil prices have not yet been brought in line with international oil prices, the latter's sharp correction will definitely keep the former in a downward trend, which will reduce the cost of car use and stimulate consumption," said Zhang Chunxiao, head of the consulting department of the SASAC Research Center.
Voice of policy: According to sources from the National Development and Reform Commission, the current revitalization planning work for the automobile and other industries is advancing. The Ministry of Industry and Information Technology is investigating and researching some policies related to automobiles. Li Yizhong clearly suggested that â€œlocalities should clean up some rules that are not conducive to private car buying and car use and encourage car consumptionâ€.
Electricity: Excess surpluses continue to show Status of the industry: In October, China's power industry experienced a negative growth of 4.65%, which was the first time in a decade that a single month of negative growth occurred. In November, the increase in electricity use in some provinces and cities fell by more than 30% year-on-year.
Under the influence of the sharp rise in coal prices and the declining demand, thermal power companies now face a loss of more than 90%, and it is expected that the annual total loss of thermal power industry will exceed 70 billion yuan.
Trend analysis: Contradictions in electricity prices will become more prominent. Structural adjustments take the advantage of "speeding up."
Affected by the overall economic downturn, the â€œsurplusâ€ ambiguity will continue to show. The power sector expects that electricity in many areas such as Anhui, Jiangsu, and Fujian will still be surplus, and the number of generator set hours may drop further, which will increase the pressure on power companies.
Since the beginning of this year, the coal linkage policy formulated by the country has been unable to implement the linkage policy. As a result, the loss of power generation companies has continued to accumulate and the contradiction between electricity prices has become increasingly acute. In the face of the complex situation of the economic situation next year, whether or not electricity sales prices can be adjusted in a timely manner has great uncertainty.
Loose electricity environment next year will make time and space for China's power structure adjustment. In the face of this year's big changes, domestic power generation companies will shift from fast-paced expansion to cost-effective development. Recently, a series of signals issued by the Central Government and relevant departments clearly indicated that in 2009, China will accelerate the pace of renewable energy development, concentrate more attention on nuclear power and other developments, and gradually reduce excessive dependence on fossil fuels such as coal.
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