Due to the increased investment in urban infrastructure, in 2016 and the new round real estate fever, rapid rise in steel prices since March, most of the iron and steel enterprises out of the red. On December 9 in a steel industry forum, Honorary President of China Metallurgical Chamber of Commerce originally Zhao Xizi made the above statement.

According to new data released by the China iron and steel Association, the end of November, China's steel price index (CSPI) to 90.38 points, rose 12.48%, 57.60 than in late January, rose up to 56.9%.

Steel prices boosted profits of the iron and steel enterprises, most of the mills around 2016. Dou Liwei, Deputy Secretary General of the China iron and steel Association said: 1 to October, large and medium sized iron and steel enterprises to achieve a profit of 28.7 billion yuan, compared to a loss of 38.5 billion yuan over the same period last year.

Zhao Xizi believes that increases in steel prices is to promote city infrastructure construction in the first place. 2016 central in the past simply relying on monetary policy to stimulate investment practices adjust focusing on urban infrastructure, national steel products sales. In January-August this year, China's urban fixed asset investment year increased by only 8.1%, but the city infrastructure construction investment reached 7.08 trillion, an increase of 19.7%. He said urban infrastructure construction with high steel content, this part of the investment cost of 85 million tons of steel, the annual consumption of 100 million tons of steel.

Second, the housing boom also led to this round of rising steel prices. Statistics data show that 2016 1 September 5.8% real estate investment size per cent nominal growth (excluding price factors in real terms 7.1%), the new construction area of 1.227 billion square meters of housing, an increase of 6.8%. Zhao Xizi pointed out that this only 1.2 billion sq m of newly started buildings around it can consume up to 8 million tons of steel, consumed at an annual 10 million tons of steel.

"Productivity" policy in 2016 national steel price rises also had an important impact. On February 1, 2016, the State Council issued the comments on the growth of steel industry resolve the excess capacity out, requirements beginning in 2016, with 5 years to reduce crude steel production capacity of 100 million to 150 million tons, 2016 capacity target of 45 million tons. Dou Liwei said that this year's "capacity" task exceeded, at present, the province reported more than 80 million tons to the State.

Dou Liwei pointed out that China's steel industry has entered the Peak District, steel consumption in the highest stage of the development of the national economy are gone. CISA figures showed in 2014, China's apparent consumption of crude steel declined from the previous year 3.4% 2015 5.4% compared the previous year. Dou Liwei expected 2015 and 2016 were little changed.

Production in 2016, 1 to October, 673 million tons of crude steel output in China, an increase of 0.7%. Dou Liwei introduced China's crude steel output compound annual growth rate in "ten five" period is 23.3%, "Eleven-Five" period is reduced to 10.3%, "Twelve-Five" period further reduced to 4.1%, "Thirteen-Five" this value is negative for the period. This shows that China's iron and steel industry by the development of incremental development to reductions.