Planned to reduce capacity - production capacity conversion coefficient, facilitating the converter replacement electric furnace. The capacity of the converter and electric furnace was reduced this time, but the reduction in electric furnace was more reduced, which means that the same capacity converter can be replaced with a larger capacity electric furnace. According to us, a capacity of 70 tons of converter can only be replaced by a capacity of 75 tons (press 1.25: 1 replacement) according to the original capacity converter coefficient (according to 1: 1 replacement); After planning, it can be replaced in a capacity of 1: 1, and the electric furnace is replaced by a capacity of 120 tons.

Electric furnace steel or development opportunities, stringed scrap, graphite electrode industry chain. The reason why the principle tends to electric furnace steel, mainly with a significant environmental advantage of short-process steelmaking process. China's electric furnace steel production is comparable to abroad, and we estimate electric furnace steel or to meet important development opportunities. In the short term, the scrap steel processing career; the price of graphite electrodes has been significantly rebounded, and it is expected to be further supported.

The latest steel production capacity is more severe, and the electric furnace can be equivalent to replacement. The Ministry of Industry and Information Technology issued the latest "Measures for the Implantation of Iron and Steel Occupational Capacity", which is more severe for the control of steel productivity replacement: (1) Strictly frame set the range of equipment for capacity replacement. (2) The replacement share is necessary to "reduce". (3) It is necessary to remove the exit device for replacement to replace the total amount of capacity of the region. It is planned to say clearly that steel enterprises will replace the converter into an electric furnace, and the equivalent replacement can be implemented.

There is no trace of polls, and it is optimistic about the fundamentals before the Spring Festival. From this plan, the steel production control policy continues to adhere to high pressure and there is no trace. The 19th National Statement also said continued to promote the change of supply side. In the short term, the warm season environmental protection is supported by the steel plate. We estimate that the steel professional supply fundamentally is still expected to maintain a tightening state before the shellings in March 15, and the amount of boom after the warm season is once Uncertainty. It is estimated that the listed steel enterprises 2017Q4 and 2018Q1 profit are still relatively optimistic, and the valuation of the steel sector is low, and the Spring Festival or has a rebound opportunity.