Zhang Changfu pointed out that from January to October this year, the average settlement price of domestic steel had dropped to 3,462 yuan per ton, a decrease of 8.9% compared with last year, and corporate losses had reached an intolerable level.

　　With prices falling, profits are naturally "ugly." According to statistics from the China Iron and Steel Association, in the first 11 months of this year, the entire steel industry achieved a profit of 11.68 billion yuan, with an industry profit margin of only 0.48%, averaging 28 yuan per ton of steel. Looking solely at the main business, steel producers' total profit was only 5.8 billion yuan. "Calculated on main business profit, that equates to a profit of only 4.2 yuan per ton of steel," Zhang Changfu said. Currently, steel enterprises are in a situation of "high output, high cost, low price, low efficiency," and times are tough.

　　The reporter noted that although the profit situation of large and medium-sized steel enterprises improved slightly in the third quarter of this year, overall domestic steel prices continued to be weak. The overall tight funding situation in the steel industry remains unchanged, and it is in the process of adjusting overcapacity. The overcapacity phenomenon in the steel industry in 2014 is still expected to persist, and the industry downturn will be difficult to change in the short term.

　　Regarding the forecast for this year's total crude steel output, Zhang Changfu pointed out, "In 2013, China's crude steel output may reach 782 million tons, and next year it may maintain a growth rate of 2% to 3% to reach 800 million tons. Therefore, steel producers, traders, and all links in the industrial chain must be prepared for a long period of hardship and austerity. At the same time, steel enterprises generally feel funding difficulties, and these difficulties will continue to intensify."

　　Speaking of the issue of "capacity slimming," Miao Changxing, Deputy Director of the Industrial Policy Department of the Ministry of Industry and Information Technology, said at the meeting that the main tasks for the transformation and upgrading of China's steel industry are to vigorously support enterprise technological innovation and technological progress, cultivate new international competitive advantages; promote green and low-carbon industrial development, and shift resource utilization toward intensive, efficient, clean, and safe methods; resolve serious overcapacity contradictions; advance enterprise mergers and reorganizations to promote excellence and strength; accelerate the elimination of outdated production capacity; promote deep integration of industrialization and informatization to improve industrial informatization levels; accelerate enterprise transformation and upgrading to enhance core competitiveness; and adjust and optimize industrial spatial layout to promote coordinated regional industrial development.

　　Among these main tasks, Miao Changxing pointed out, "Environmental protection standards will be an important basis for eliminating outdated production capacity during the '13th Five-Year Plan' period. Currently, the Ministry of Industry and Information Technology is drafting documents to improve industrial policies and promote the transformation and upgrading of the steel industry." Miao Changxing also revealed that the government supports steel enterprises in transferring overseas through modes such as aid construction, joint ventures and cooperation, and building overseas processing and distribution centers.

　　Regarding capacity utilization, Zhang Lei, Vice President of China Metals and Mining at Morgan Stanley, emphasized, "Global steel capacity utilization is on a declining trend, currently around 75%, and we expect steel prices to continue fluctuating within the existing range in the short to medium term."

　　As for the upstream raw material iron ore market for the steel industry in 2014, Zhang Lei believes that although iron ore supply will increase, supply in the first half of 2014 will remain tight. "In the first half of next year, iron ore supply will still be relatively tight. We expect iron ore prices to be $130 per ton in the first quarter of 2014 and return to $120 per ton in the second quarter."

　　Meanwhile, Yang Hua, a senior analyst at the research center of Shanghai Steel Union's "Mysteel," after considering real estate development investment, railway infrastructure investment, machinery industry, and automotive steel demand, judged that next year's crude steel consumption will be around 760 million tons. At the same time, Yang Hua expects next year's iron ore price to be $110 to $145 per ton.