In recent years, China's steel structure industry has been "losing steadily" on the issue of profits. According to the statistics of the Steel Structure Association, in the first half of the year, the cumulative profit of the steel enterprises of the steel association was only 1.785 billion yuan, a significant decrease of 44.549 billion yuan year-on-year, a decrease of 97.81%; The loss of loss-making enterprises was 16.248 billion yuan, and the loss area reached 37.75%; The sales margin fell to only 0.23% from 3.56% in the same period last year. The profit level of the industry has been extremely low and on the verge of loss, if the investment income is deducted, the main steel industry is actually in a state of loss.

Since the beginning of 2013, China's steel production has continued to grow, and will reach 741 million tons according to the annual output in early April. According to relevant statistics, China's steel production capacity has reached nearly 1 billion tons. Therefore, controlling the total amount should become the consensus of the whole industry. China's steel industry steel output reached about 700 million tons in 2011, making it a veritable steel power. Now, China's iron and steel industry is developing to a strong country in technology and products, but in terms of economy, the continuous decline in industry efficiency is becoming a "bottleneck" that hinders China from becoming a steel power.

The author believes that overcapacity is a dominant factor in the industry's losses. At the beginning of April this year, after the steel market price stopped falling and rebounded, the steel mills quickly resumed production, and the steel supply expanded rapidly, so in mid-April, the steel prices in the national market began to fall, especially the market prices of hot-rolled coils, cold-rolled coils, wide and heavy plates fell by 100 yuan/ton ~ 200 yuan/ton. By the end of April 2012, the average daily crude steel output of key domestic iron and steel enterprises was 2.0258 million tons, a record high. Although the average daily output of crude steel has declined since then, by the end of July, the average daily output of crude steel of key steel enterprises was 1.6073 million tons, but the domestic crude steel output due to the release of new production capacity in previous years has accelerated, further exacerbating the contradiction between supply and demand, and the market recovery will still be slim.