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Will the economic crisis come? How about the future of refractories?


At the beginning of 2020, the novel coronavirus epidemic broke out suddenly, causing immeasurable losses to China's economic development. It took only three months from the outbreak to the control of the epidemic, and China is now embarking on rapid economic recovery. However, the situation abroad is not optimistic. The epidemic has spread in Europe and the United States, panic has intensified, oil prices have fallen sharply, U.S. stocks have been blown for many times, and European stock markets are not optimistic. All kinds of signs can't help but remind us of the situation when the economic crisis broke out in 2008. Is the economic crisis in 2020 coming?

China's economy under the impact of the 2008 economic crisis

Recall that in 2008, Lehman Brothers holding Inc., with a history of 158 years, filed for bankruptcy, which triggered a chain reaction that led to chaos in the credit market and triggered a financial tsunami. At that time, China was implementing macro-control characterized by "tightening" in response to the overheating of the economy since 2007. The financial crisis spread to all economic fields across the country like a "domino". In just a year or two, China's economy experienced ups and downs. In the first quarter of 2009, China's economic growth fell to 6.6%, the growth rate of import and export was negative, and a large number of enterprises closed down or reduced production.

The growth rate of China's refractory industry has slowed sharply, almost negative growth

China's refractory industry is also not immune. According to the statistics of China Refractory Association, China's refractory output was 24.17 million tons in 2008 and 24.53 million tons in 2009, with a year-on-year increase of only 360000 tons, an increase of only 1.49%, which has a great impact.

In 2008, China Refractory window launched the refractory raw material price index data, which reflects the trend changes of the development of China's refractory industry through the index, and the changes of the refractory raw material price index are basically consistent with the economic development changes. As can be seen from Figure 3, the fire resistant raw material price index began to decline significantly in September 2008, then went down all the way, and did not rise slightly until the fourth quarter of 2009.

Four trillion investment to rescue the market

In response to the crisis, the Chinese government introduced ten measures to further expand domestic demand and promote steady and rapid economic growth in November 2008. It is preliminarily estimated that the implementation of these ten measures will require an investment of about 4trillion yuan by the end of 2010. With the passage of time, the Chinese government has continuously enriched the policies and measures to deal with the financial crisis, and gradually formed a package plan to deal with the financial crisis. After 2009, China's refractory industry has also entered the channel of rapid development. Under the stimulation of a series of economic policies, China's refractory production has increased significantly. In 2010 alone, it increased to 28.08 million tons, an increase of 3.55 million tons over 2009, an increase of 14.47%.

After the 2008 financial crisis, the industrial chain was reshaped, and China accelerated its integration into the trading system with obvious comparative advantages. At the same time, stimulated by the 4trillion investment and the "ten major industries revitalization plan", the domestic economy has experienced a new round of rapid development, and the proportion of GDP has also increased rapidly. In 2008, the GDP was US $4.60 trillion, accounting for 7.23% of GDP. By 2018, the GDP reached US $13.46 trillion, accounting for 15.95%, becoming the second largest economy. The refractory industry has also developed rapidly, reaching a peak of 29.49 million tons in 2011.

What impact will the new economic crisis bring?

In 2020, the novel coronavirus epidemic swept through. On March 10, when the U.S. stock market opened, the U.S. Dow Jones index plummeted by about 2000 points, triggering the circuit breaker mechanism. Then, U.S. stocks triggered the circuit breaker mechanism several times in succession, and the impact of the decline of U.S. stocks has even exceeded the subprime mortgage crisis in the United States in 2008. The spread of the epidemic has also had a serious impact on China's economy. According to the data of the Bureau of statistics, from January to February 2020, the added value of China's industries above Designated Size actually decreased by 13.5% year-on-year (the following growth rates of added value are the actual growth rates after deducting price factors). On a month on month basis, in February, the added value of industries above designated size decreased by 26.63% over the previous month. From January to February, the national fixed asset investment (excluding farmers) was 3332.3 billion yuan, a year-on-year decrease of 24.5%. By sector, infrastructure investment fell by 30.3%, manufacturing investment fell by 31.5%, and real estate development investment fell by 16.3%. From the perspective of industries Industrial investment decreased by 25.6%, secondary industry investment decreased by 28.2%, and tertiary industry investment decreased by 23.0%.

China's refractory industry under the epidemic

China's refractory industry has also been seriously affected. According to the statistics of, as of February 29, the overall operating surface of refractory enterprises has exceeded 80%, and the capacity utilization rate is less than 50%, but it has been able to meet the production demand of downstream steel, cement and other industries, and there has been no impact on the production of downstream enterprises due to the supply interruption of refractory materials. Fundamentally, the current insufficient capacity release in the metallurgical building materials industry is the main factor affecting the operating rate of refractory enterprises. However, nearly 80% of refractory enterprises are pessimistic about the production and operation of the company in 2020. And under the influence of the epidemic, the cost of logistics, management and epidemic prevention of enterprises increases, and the business development is limited, which will significantly affect the profits and revenue of enterprises.

The government's efforts to restore the economy far exceeded those in 2008

The Standing Committee of the Political Bureau held a meeting on March 4, which pointed out that it was necessary to increase investment in public health services and emergency material support, and speed up the construction of 5g networks, data centers and other new infrastructure. We should pay attention to mobilizing the enthusiasm of private investment. Industrial Internet is the foundation of intelligent manufacturing development, which can provide common infrastructure and capabilities. First, the foundation of industrial manufacturing, including * * s process, materials, technology and manufacturing capacity; The second is the basis of networking and digitalization. It connects equipment, products, customers, business processes, employees, orders and information systems into a network, through which data are collected and analyzed, and the relevant results are used to improve production efficiency and reduce resource consumption. At present, in addition to large enterprises benefiting from the improvement of quality and efficiency brought by the industrial Internet, the voice of small and medium-sized enterprises to transform the industrial Internet is also growing. For refractory enterprises, we should pay more attention to the market information services, logistics services and the opening of online sales channels of the refractory industry. Enterprises usually need to operate in multiple modes to prevent disasters before they happen. Everything is established in advance, and it is abandoned if it is not done in advance. In the future, the industrial Internet will play a role, "digitalization" will become a new mode of production, and the purchase, production and sales of enterprises will certainly be transferred from offline to online. The premier presided over an executive meeting on March 17. The meeting stressed that promoting the resumption of major investment projects should be an important part of stabilizing investment and expanding domestic demand, and that efforts should be made to help solve the problems of employment, raw material supply, capital, and epidemic prevention material support in the construction of major projects of all kinds of ownership, so as to promote the construction progress of 11000 key projects under construction in all regions. Accelerate the issuance and use of local government special bonds issued in advance according to regulations, pay close attention to the issuance of investment within the central budget, supervise and urge to step up the preliminary work of more than 4000 key projects planned to start this year, and strengthen the reserve of follow-up projects. We will open green channels for the examination and approval of major projects and start construction as soon as possible.

In the post crisis era, the refractory industry has a promising future

Under the influence of the epidemic, the economy has declined. Even if there is a new economic crisis, I believe that under the orderly organization of the government, China's economy will burst into new economic growth vitality and embrace a better future on the basis of new infrastructure. The first is The quarter itself accounts for a small proportion of the annual GDP, and it will be significantly better in March than in January and February under the stimulation of various policies. As the effectiveness of domestic epidemic prevention and control continues to show, the process of resumption of work and production is accelerated, and the people's normal production and living order is restored, the impact of the epidemic will continue to weaken. At that time, China's GDP in the second quarter will rebound significantly, that is to say, the impact of the epidemic on China's economy is short-term, It will not change the fundamentals of the overall improvement of China's economy. Secondly, the impact of the epidemic will also make investors reconsider the importance of the investment environment. In addition to stable investment policies and the free flow of capital, they will also consider the importance of public security, that is, the government's ability to respond to public security crises. There is no doubt that China can almost get full marks in this project. It is likely that after the end of the epidemic, the industrial chain and funds will be transferred to China. The uncontrolled epidemic in Europe and the United States is bound to cause a heavy blow to the economy. Against the background of a sharp reduction in demand, there is still a great possibility that demand outside the original China will transfer to China, a safe place! Thirdly, more than 70% of refractory products mainly flow to the steel industry, which is affected by both market and policy. Many domestic steel enterprises are implementing cross regional, cross provincial and cross ownership mergers and acquisitions to seek greater, more stable and further development space. According to the statistics of window of refractories, in 2019, nearly 200 steel enterprises across the country had steel projects under construction, such as the steel capacity reduction, replacement, transformation and upgrading project of Tangshan Yanshan iron and Steel Co., Ltd., the relocation project of Hebei Huaxi iron and Steel Co., Ltd., the intelligent upgrading and reconstruction project of the medium and heavy plate production line of the stainless hot rolling plant of Shanxi Taigang Stainless Steel Co., Ltd, The launch of these projects will provide sufficient demand market for the consumption of refractory products. As the foundation of high-temperature industry, China's refractory industry will not only need strong support from the refractory industry, but also bring new development opportunities for the refractory industry.