The central bank will prohibit the steel industry?

On July 21, there were rumors that the central bank issued internal notice to prohibit the issuance of new ** to nearly 10 industries with excess capacity, such as cement, steel making, iron making, chemical fiber, electrolytic aluminum, and coal, while prohibiting these industries from being short Securities, medium-term notes, convertible bonds, new corporate bonds, etc.

The rumors also pointed out that the central bank noticed that those enterprises that are willing to automatically stop production and abandon production in the above-mentioned industries with excess capacity may reduce or exempt part of the interest or help convert production.

According to Zhu Xi'an, analyst of Steel Union Information, the channel for steel enterprises is nothing more than stock market, banking, and issuance of bonds. In recent years, the scale of bonds of iron and steel companies is relatively large. If the above rumor is true, it will have an impact on the steel industry. Big impact.

In addition, according to the statistical data of the Steel Union Information, in the first half of this year, a total of 36 steel companies issued and intend to issue short-term ** vouchers, medium-term notes, stocks, corporate bonds, etc., if all the successful issuance, the scale is expected to 838 About 100 million yuan.

The data shows that at the end of 2012, the total liabilities of large and medium-sized steel enterprises in China were 2.83 trillion yuan, 7 times that in 2001, and the debt ratio was as high as 68.3%. In addition, in 2001, the debt-to-asset ratio of steel enterprises was still at 49.65%, and the debt ratio rose to 60.09% in 2008, showing an upward trend year by year.

According to an incomplete statistics of the Steel Union Information Group, the iron and steel industry in the above ten overcapacity industries had 37 steel companies in 2011, with short-term vouchers, medium-term notes, public issuance of new shares, corporate bonds, etc. Total **16.835 billion yuan.

In 2012, there were 62 steel companies that issued or planned to issue short-term vouchers, medium-term notes, corporate bonds, etc., and if these steel companies were all successfully issued, the total amount would be around 172.92 billion yuan. According to the steel company's announcement, this part of the funds will generally be used to repay bank loans, repay due debts, purchase raw materials, and supplement working capital.

It is worth noting that the steel industry in 2012 was referred to by the Chinese Iron and Steel Industry Association as "the most difficult year since the 21st century." Data from the China Steel Association shows that in 2012, January 1, 2, 6, 7, 8, and September China's steel industry suffered a total loss of six months in the industry. There were 23 cumulative loss-making enterprises throughout the year, an increase of 15 over the same period of the previous year, a loss of 28.75%, and loss of the loss-making enterprises amounted to RMB28.924 billion, a year-on-year increase of 7.39 times.

Wang Jianhua, editor-in-chief of “My Steel”, believes that if the above rumor is true, it will cause a batch of steel companies to be eliminated, but this will benefit the overcapacity steel industry.

Zhu Xi'an also believes that if the above rumors are true, the impact on steel prices will be favourable, and it will help curb the expansion of steel production capacity and eliminate backwardness. "However, the specific impact still depends on the specific implementation."

It is worth noting that rumors claim that the central bank’s notice was issued in early July, but local enforcement efforts are limited.

According to statistics released by the Steel Union, from the beginning of July to the 22nd this year, there are three steel enterprises, Xingtai Steel Co., Ltd., Panzhihua Iron & Steel Group Co., Ltd., and Anshan Iron and Steel Group Co., Ltd., which are respectively planning to issue 400 million yuan 365 days vouchers, 45 Billion 365 days vouchers and 2 billion 270 days super short vouchers.

However, Xingtai Iron & Steel Co., Ltd. recently issued an announcement that the company originally scheduled to issue a total of 400 million yuan in the 2013 first-period short-term vouchers on the 17th. Due to market volatility, the short-term short-term bonds were within the originally negotiated interest rate range. Insufficient subscription, the company decided to re-issued at a time. That is, the short-term vouchers for Xingtai Iron and Steel were forced to postpone due to insufficient subscriptions.

As of 5 pm on July 22, the central bank has not responded to the rumors.