Experts estimate steel trade up to 25% warning ** systemic risk

Introduction: Profits continue to decline, the industry is losing money, and the steel trade is increasingly difficult to do. Steel trade companies have become a springboard for many bosses to turn from profit to profits in the banking industry. How large is this risk for banks? Will the steel trade industry meet? The emergence of the boss running trend? Today continues to focus on a series of reports "hollowing of the steel trade crisis."

China Guangwang, Beijing, February 17 (Reporter Huang Yaowei and Shu Shuming) According to the economic report, making good use of bank money is an open secret for the steel trading industry. In 2011, the overall loss of the steel trade industry made it easier for some steel traders to use steel to invigorate bank funds and turn to profitable industries. Experts pointed out that illegal pledges expose banks to the steel trade industry to expose a greater risk exposure and warn of the systemic risks that this ** may cause. Please continue to listen to the Voice of the Economy series "The Crisis of Hollow Steel Trade".

As a class of financial products, steel and steel traders have been the preferred collateral and object of the major banks. The person in charge of a major bank’s ** business told reporters that banks currently invest in the steel trade, including steel materials, warehouse receipts, bills, mutual guarantees, guarantees, guarantee companies, etc. Pledges and corporate mutual guarantees are the mainstays. The percentage of ** is between 10% and 20%, and each bank is slightly different.

Bankers: Because this ** is related to several departments, the bank has internal business units, small and medium-sized enterprises, large companies, and different customers.

However, He Zhicheng, a senior economist at the Agricultural Bank of China, believes that the data given by banks is relatively low, and the actual ratio is higher than this figure.

He Zhicheng: Because there is no steel trader who does not suffer. The total scale of steel traders, that is, the current year's total inventory exceeds the annual output of our country. If the inventory is greater than this, if it is half, it is about 450 million tons, and the average price is about 3500-4000. You can figure this out by measuring it.

According to the estimation method provided by He Zhicheng, last year's steel production amounted to 881 million tons. The bank's current pledge ratio for Steel Products is 60%-70%. According to the conservative estimate of 50%, the comprehensive average price of steels such as long products and sheet materials is 4,300 yuan. In terms of tons, the steel trade in the whole year was 1.89 trillion yuan last year, and the total amount of new money added by the central bank was 7.47 trillion yuan last year. The proportion of the steel trade in the entire bank accounted for 25.36%.

The problem is that if it is a normal pledge, there is no risk for the bank. Because the pledge ratio is only 60%-70%, unless the steel price shrinks by 1/3, there will be cases where the value of steel cannot cover the value of **, but this possibility is almost impossible.

He Zhicheng believes that the real risk comes from the current prevalence of excessive steel pledges, repeated pledges, and one-vote overcharges:

He Zhicheng: Where is the problem? If this warehouse receipt is a repetitive mortgage, it will be troublesome. After you lend money, you will enter the steel again. Take these steels and you will re-mortgage. This is troublesome again. Or you have several steel traders joining together to operate. For example, A refinance may be troublesome. You take this money to B, and B will come in and charge the steel later. This situation is the risk. **There are multiplier effects and amplification effects.** In general, the physical mortgage base has been lost.

A quarter of the ** invested in the steel trade. It should be said that the proportion of such ** is very high, and experts have also issued risk warnings. So what do banks think about this risk? Continue to listen to the reporter's observations:

A person in charge of a bank believes that the rigorous control of advances, events, and hindsight of the steel trade rigorously will not be too risky and it is controllable:

Bankers: The risk is basically controllable. For example, if the steel trader runs away, steel materials can be used to auction its steel products. The bank's funds are still relatively safe. There are corporate mutual guarantees, as well as guarantee company guarantees, if we say running away, we can find the full amount of the guarantee company compensation. Anyway, they are all responsible.

However, He Zhicheng believes that this risk can not be ignored, and may even be systemic. He pointed out that in Wenzhou's concentrated capital chain breakout last year, those who played capital operations took mortgages from real estate to banks, and then switched to pursuing high returns. The current problems in the field of steel trade are exactly the same. Only the carrier of the operation was changed from real estate to steel.

In addition to the risk of collateral violations, He Zhicheng also has a concern that the off-balance-sheet bills issued by banks will be the last straw that will kill the camels:

He Zhicheng: There are a lot of bills. The bill is an off-balance-sheet business, or it does not directly account for the size of the total amount. All of it has an implicit risk. The bills are short-term. For two or three months, for example, if your turnover does not come, or if macro-finance continues to be tight, it is very likely to trigger a break in the capital chain, which is faster than real estate.

Weekly manager of Wuxi Longzhijie steel trade market in Jiangsu said that the risk of steel trade has caught the attention of banks.

Manager Zhou: Many banks also went to the library and went to see and communicate with their peers. Many bank leaders could not sleep at night. Many banks have resorted to various means in order to be able to withdraw their expiring prisoners. As long as you still return, I'm sure to let go. In fact, at the end of last year in particular, a lot of the steel trade that was withdrawn had not been put down because it went through a review and found that it was not in compliance. In a sense, this is a kind of progress, but it also knows that it cannot be forced to die too much. There is no way to achieve it in one step and it is entirely straightforward.