The asset and debt ratio of the steel industry gradually rises

At present, the domestic steel companies' living conditions can be described as difficult, the demand is sluggish, profits decline, and liabilities are high. Affected by this, the credit status of the entire industry has further deteriorated, and the market has frequently exposed the news that steel enterprises have been included in the credit rating watch list. China Credit Ratings Co., Ltd. released ratings and industry outlook reports for four industries including steel, home appliances, toll roads, and hydropower on the 22nd. In contrast to the three other industry outlooks that maintain "stability," the only exception is the outlook for the steel industry. "Stable" is adjusted to "negative."

In this regard, Yan Liqiong, an analyst with China Bond Credit and Steel Industry, said that although the steel industry has acquired strong current capacity and good liquidity, continued weakening of profitability and relatively high debt burden will further weaken the industry's average debt repayment index. In the short-term, there is a risk that the industry's earnings will continue to decline. The continuous high debt burden makes the industry as a whole face relatively large financial risks.

While the profitability of the steel industry has declined, the debt-to-equity ratio of steel companies is gradually rising. According to Wind data, among the 44 listed steel companies, the asset-liability ratio of 25 companies in 2011 increased compared with the previous year. Since only three companies currently disclose the 2012 annual report, it remains to be seen whether the debt situation will further increase.

At the same time, public information shows that in addition to the negative outlooks of Anyang Steel, Anshan Iron and Steel, and Stellar Technology's rating outlook, including Sinosteel, Chongqing Iron and Steel, and Maanshan Iron and Steel, they were included in the credit rating watch list, in the future if their profitability and solvency Deterioration does not rule out that the rating of the entity may be lowered.

Xu Xiangchun said that the iron and steel industry showed the characteristics of “one high and three low” in the past year, namely, high production capacity, low demand, low prices, low efficiency, and overcapacity problems. It is expected that steel demand will be driven by the economic recovery and urbanization this year. There will be an increase of 4% to 5%, and the price will increase by 5%. The operating conditions of steel companies will improve slightly, but the overall situation is still not optimistic.