Recently, with a series of strict environmental protection policies, can we really control steel production capacity? This speculation may be a bit exaggerated.

First of all, the production capacity will be sustained because steel mills are optimistic about the market outlook. Under the temptation of GDP and taxation, and stimulated by various old and new projects, they will choose to launch new projects blindly, exacerbating excess capacity.

Secondly, it seems that the current demand prospects are also very good. Whether it is infrastructure such as railways, urban rail, or future urbanization construction, it is a huge temptation for steel companies, and Premier Li Keqiang of the State Council has made it clear that the economy is approaching the lower limit. After stabilizing growth, experts say that investment will be the most effective stimulus in the short term, no matter what measures are taken. At present, the main measures that are more inclined to the policy involve shantytown renovation, railway investment, urban infrastructure construction, and expansion of real estate enterprise financing. The second round of shantytown renovation is about to kick off. The State Council has made it clear that it plans to renovate various shanty towns in the next five years. With such optimistic demand, there is really no reason to reduce production capacity.

Although the steel market outlook is good on a macro level, we know that overcapacity has always been the biggest problem plaguing the steel industry. In this case, even if the terminal demand is huge, the production capacity still far exceeds the demand, causing the price of steel to continue to rise. Don't go. The more serious the problem of overcapacity is, the more unfavorable it is for the survival of my country's steel enterprises. For many years, the continuous production of steel plants has not made the enterprises profitable. If the problem of overcapacity cannot be solved, the profits of my country's steel industry will be further squeezed.

Of course, if the environmental protection policy is really powerful, it will indeed have an impact on the steel industry. Since this year, in terms of environmental protection, the steel industry has been particularly strict, from the control of smog weather to the formulation of the air pollution prevention and control action plan and its upcoming launch. , the Environmental Protection Bureau has always held high the banner of strict environmental protection policies. Although there have been strict measures against the "three high" industries of the steel industry, every time it is nothing. Judging from the execution efficiency in the first half of the year, it seems that there has not been any major progress. The steel plant still maintains high output. It was only in the first ten days of July that some results were achieved, but whether this effect can be maintained is still a big problem.

Based on the above summary, the policy is like a teacher teaching students who don’t like to learn. If you push it, it will get better for a while, and after that, it will return to its original state. Only when students realize the importance will they really get better. Therefore, according to the author's point of view, the policy can not save the steel market in the true sense, and the road of the steel industry is getting more and more difficult and bumpy. Unless the government can really make a comprehensive plan for the steel industry, instead of letting the Environmental Protection Agency make decisions to control production capacity from the side, the current steel situation can be substantially improved.