Most steel companies will be on the verge of profit and loss.

Most steel companies will be on the verge of profit and loss. Oriental Securities: April 2009 Our country crude steel, pig iron and metal production respectively 43.41 million tons, 41.63 million tons and 53.92 million tons, respectively year-on-year change-3.9%, 0.4% and 2.6%. April average crude steel daily output of 1.447 million tons, compared to the March quarter-on-quarter decline of 0.5%, ending the 5 consecutive months of crude steel daily output chain trend. This is mainly reflected in the upfront price of steel is falling, industry losses, the domestic steel mills exploratory production; it is noteworthy that the output of cold-rolled sheet volume increased by 9.4% per cent, which may be related to the production of new projects and the more than expected production and sales of automobiles; in April, the net imports of crude products were 880,000 tons, and the apparent crude steel consumption was 44.29 million tons Rose 7%.　　Domestic crude steel consumption grew more than 7% per cent, given the decline in social inventories and the likely continued decline in stocks. After three consecutive weeks of steel price rebound, some steel mills have been restored to the break-even point near. In addition to the seasonal demand recovery expected to maintain market share of rigid demand, domestic steel production is due to the meaning of rehabilitation.　　We expect May crude steel daily output chain increase, which plate new production capacity of the production pressure is greater. Recent domestic steel prices are warming trend, we believe that in the liquidity of abundant, seasonal demand recovery and other factors support, steel price a small rebound is still under the normal fluctuation of the cost line, but the excess capacity pressure will restrict the sustainability of steel price rebound and range. From the production capacity, inventory and downstream demand analysis, the two-quarter domestic long material price trend will be better than the plate. Because of the obvious excess capacity, the steel industry is expected to be in a period of profitability in 2009, most of the steel companies will be hovering in the profit and loss balance points. Based on the quarterly Quarter-on-quarter trend, with the high cost of raw materials inventory digestion, government investment needs improvement and steel price below the cost of stabilizing rebound, the next six months the steel industry will have a small increase in the chain of improvement process, but the expected space is small.