China's macroeconomic downstream, downstream steel demand continues to slump, overcapacity increasing pressure to the steel industry push "winter": Since 2011, China's steel prices continued to fall, as of 2015 the end of December longs fallen about 60%, the plate is down 38.84 % - 61.96%, the steel industry profitability continued to deteriorate. Under the supply-side structural reforms to promote excess production capacity iron and steel industry through the "market-oriented means" exit, steel product structure will be further optimized, low excess capacity clearing accelerate structural reforms and the transformation and upgrading of the steel industry is the future of the two important direction of development.

First, the overall profitability was weaker than last year

2015 steel industry total profit 52.6 billion yuan, down 68.10 percent, 47 listed companies in our coverage, published 2015 results 39 enterprises, the loss amounted to 58.97%. Excluding losses and waxing company, the average net profit of 1.63 billion yuan, down 70.78 percent.

1, turnaround 3: Shandong Iron and Steel (600 022), Lingganggufen (600 231), the new Hang on

Force (600,165); 2, profits increased 7: Fushun Special Steel (600399), Hongyu new material (300 345), Yu diamond (300064), the Yangtze new material (002 652), Jinzhou pipeline (002 443), SFD (300 179), the European Pu Chi net (002,711); 3, profit decrease 6: Chang Po shares (002,478), Din Tai new material (002 352), Jiuli (002 318), the new steel shares (600,782), Baosteel ( 600019), Jinling Mining (000,655); 4 from surplus to deficit 19: Jiuquan Hongxing (600 307), Hangzhou Iron and steel shares (600,126), Chongqing Iron & steel (601005), Anyang Iron & steel (600569), Xining Special steel ( 600 117), Valin Iron & steel (000,932), three steel Min light (002 110), Maanshan Iron & steel (600808), Baotou steel shares (600010), Bengang steel plates (000761), Shanghai steel Union (300226), TISCO (000825), Shougang shares (000959), Liuzhou Iron and steel shares (601003), Wuhan steel shares (600,005), Nanjing Iron & steel (600282), Angang steel (000898), sand steel shares (002,075), a large steel square (600,507); 5 loss increased 3: Zhongyuan Special steel (002423), SGIS (000 717), Bayi Iron & steel (600581); 6, a loss reduction: Panzhihua vanadium and titanium (000629).

From each sector breakdown, the ordinary steel, special steel involvement poor earnings economic downturn, new materials, processing, electricity supplier sector fared slightly better. Steel companies in the S & P has given notice to 27 results, with 19 loss-making enterprises, profit-making enterprises 8; in the steel sector has given notice in the performance of five companies, of which only one company Fushun Special Steel show a profit; new materials sector have been published the performance of the company showed a profit, and a significant increase compared to 2014; deep-processing sector companies have reported earnings, but the two companies profit narrowed; two steel business enterprise Chi Pu-EU net profit Trailer 1.57 billion yuan, an increase of 23.93%.

Second, the transformation and upgrading of the industry will inject new vitality

Supply-side structural reforms to promote substantive, it is recommended emphasis on supply-side structural reforms under the iron and steel industry investment opportunities. This time supply repeatedly raised before the intensity of the side of reform was significantly higher than the steel industry to produce energy, industrial restructuring enterprise special fund landing, to the capacity to determine the scale and "the State Council on the steel industry to resolve the overcapacity achieve turnaround development view" marks supply side structural reforms have begun to promote substantive follow-up with the production capacity out of the way, matching funds allocation, debt management programs, personnel placement programs and other relevant policies to gradually fall, excess production capacity iron and steel industry is expected to accelerate, "clearing" supply-side structural reform of the steel industry will be one of 2016's most important investment theme of great importance to the supply-side structural reforms steel industry investment opportunities, the proposed focus on three types of target: 1, high flexibility: Valin Iron & steel, Anyang Iron and steel, the new steel shares, etc. ; 2, underestimate the value of regional leader: Baosteel, Angang, River steel, Wuhan steel shares and so on; 3, there is a transition expected value "shell": Bayi Iron and steel, SGIS, shares of Shougang, Ling steel shares.

Supply-side structural reforms is essentially the "reduction and quality and" optimize the product structure, thereby upgrading the industrial structure, steel takes on more important task in nuclear power, military, aerospace, automotive, high-speed rail and other areas, ten our oil and gas pipeline construction is expected to accelerate during thirty-five, steel pipe and steel industry investment opportunities in the process of transformation and upgrading also worth focusing on, the proposed focus: Daye Special steel (000708), Fangda Special steel, Yongxing special steel (002 756), Fushun special steel, and Yulong shares (601,028), Jiuli, Jinzhou pipeline, Chang Po shares