From July 10 to 11, the 2024 Standing Council of the All-United Metallurgical Chamber of Commerce (hereinafter referred to as "Metallurgical Chamber of Commerce") was held in Jiangsu Yongsteel Group. Leaders from relevant ministries and commissions of the state and the Metallurgical Chamber of Commerce, experts and scholars from authoritative think tanks in the industry, as well as leaders from many private steel enterprises, jointly take the pulse of the development trend of the steel industry and explore a new path to promote the high-quality development of the metallurgical industry with new quality productivity as the focus.

Trend watching
-- Iron and steel enterprises must survive in the process of reduction and adjustment

Ding Liguo, president of the Metallurgical Chamber of Commerce and chairman of Shanghai Delong Iron and Steel Group, pointed out that since the beginning of this year, the steel industry has experienced the severe test of insufficient market effective demand and industrial losses. Although the state supports the real economy, expanding demand, stabilizing the market and a series of measures to benefit the development environment of the steel industry, the triple pressure of demand contraction, supply shock and weakening expectations still exists, especially due to the lack of effective demand, steel market shock and low prices, resulting in a decline in profits of steel enterprises, some enterprises are in a state of loss or struggling on the edge of loss.

According to the statistics of the Metallurgical Chamber of Commerce, from January to May 2024, key private steel enterprises (enterprises counted by the Chamber of Commerce) achieved sales revenue of 1,278 billion yuan, down 0.6% year-on-year; Profits and taxes reached 18.5 billion yuan, down 3% year-on-year; Profit was 7.5 billion yuan, down 1.2% year-on-year. Although private steel enterprises began to make profits in April, there are still 50% of enterprises that have suffered losses, and the profitability of the entire private steel enterprises is relatively poor.

Behind the poor profitability is the year-on-year growth of steel production and the decline in effective consumption, and the contradiction between oversupply and demand in the steel market is prominent. According to data released by the National Bureau of Statistics, China's steel production from January to May 2014 was 574.05 million tons, an increase of 2.9%, while the national equivalent apparent consumption of crude steel from January to May was 39.551 million tons, a decrease of 15.03 million tons, a decrease of 3.7%.

"The increase in crude steel and steel production of private steel enterprises is higher than the national level, and the task of controlling production and stabilizing prices is arduous." Ding Liguo said.

In addition, according to customs statistics data, from January to May 2024, China's cumulative exports of steel 44.655 million tons, an increase of 27%; The cumulative average export price was $788.5 / ton, down 33.4% year on year. From January to May, China imported 3.043 million tons of steel, and the average price of cumulative imports was $1658.6 / ton, down 4% year-on-year.

"Steel exports increase in price, anti-dumping risks are increasing. I have been doing research abroad recently, and the export situation is not optimistic, and some traditional regions may face the challenge of anti-dumping measures and high tariffs in the future." Ding Liguo stressed.

As for whether the steel market will usher in a turnaround in the second half of the year, Xu Xiangchun, chief information officer of Shanghai Steel Union, believes that this year's steel demand is still a process of reduction, but there are some positive factors, because the operation of the steel industry is closely related to China's economic cycle. At present, China's economic cycle has begun to bottom out, ushering in a new round of replenishment of inventory cycle. Whether the steel market can rebound in the second half of the year depends on whether the steel production control policy in the "2024-2025 Energy saving and carbon Reduction Action Plan" issued by The State Council can be effectively implemented. The plan proposes to continue to implement crude steel production control in 2024 and strictly control the export of low value-added basic raw material products. If the policy control is effective and effectively implemented, the market may usher in a bottoming out.

Chen Hongbing, vice president of Jiangsu Iron and Steel Industry Association, stressed that in the medium and long term, the steel industry will change from a strong cycle to a spiral contraction in the next 10 years, and the industry supply and demand relationship will continue to show negative changes. In the future, iron and steel enterprises can only survive in the reduction and adjustment, and seek development in efficiency improvement and value enhancement.

strategize
Only by going "new" can we break the situation

In the face of complex situation, where is the development direction of private steel enterprises?

"During the two sessions this year, the General Secretary put forward the development of new quality productivity in accordance with local conditions in Jiangsu Regiment, which pointed out a clear direction for our development." Yongzhuo Holding board chairman Wu Yaofang said.

Zhao Xizi, former deputy director of the State Bureau of Metallurgical Industry and honorary president of the founding of the Metallurgical Chamber of Commerce, especially stressed that the steel industry must develop new quality productivity if it wants to get out of the dilemma. Steel enterprises should have the courage to explore new paths of development, transform and upgrade, improve their core competitiveness, actively adapt to market changes, and seize more development opportunities.

Gan Yong, director of the National New Materials Industry Development Expert Advisory Committee, former vice president of the Chinese Academy of Engineering and academician of the Chinese Academy of Engineering, put forward two important structural adjustment strategies in the transformation and upgrading of the steel industry. One is merger and reorganization. Baosteel, for example, has become one of the world's largest steel groups with an annual production capacity of 150 million tons through the merger of Heavy Steel, TiSCO, Masteel, Wisco and other enterprises. This merger and reorganization helps to integrate the professional resources of each steel mill, thereby improving the overall operational efficiency and technical level. The other is to build a digital intelligent platform. This platform does not rely on the traditional way of asset merger, but through limited joint, mutual participation and cooperation, will be a number of iron and steel enterprises (such as Shagang, Nangang, Zhongtian, Yongsteel, etc.) connected together to form an intelligent production platform. The platform uses modern technical means (such as big data, cloud computing, etc.) to guide production, logistics, sales and service, so as to achieve the optimal allocation of resources and the lowest cost. This platform operation model can not only improve the market response speed, reduce business risks, but also enhance the cooperation and win-win situation between enterprises.

In the view of Xiao Bangguo, deputy secretary of the Party Committee and vice president of the Metallurgical Industry Planning and Research Institute, the goal of developing new quality productivity in the steel industry is to implement innovation-driven. To achieve the "quality" of steel products, that is, to meet their own and the downstream industry's new quality productivity development of product structure adjustment as the focus. To create "advanced productivity", that is, to improve production efficiency, green and low-carbon development as a sign.

"China's steel industry has entered a period of accelerated evolution from scale efficiency to quality efficiency, and is in a critical period of historic leap from large to strong, and challenges coexist with opportunities." From the perspective of challenges, the development trend of supply and demand reduction is more prominent; From the perspective of opportunities, the basic trend of our economy in the long run has not changed. The new quality productivity is the modern advanced productivity which is produced by the revolutionary breakthrough of technology, the innovative allocation of production factors and the deep transformation and upgrading of industry. Now is the right time to adhere to the leadership of innovation and create new quality productivity in the steel industry." Said Zhang Haideng, deputy director of the raw material industry department of the Ministry of Industry and Information Technology.

Look for the future
-- Building momentum and empowering private steel enterprises with new quality productivit

The General Secretary pointed out that to develop new quality productive forces, all localities should adhere to the actual situation, first establish and then break down, adapt to local conditions, give classified guidance, and selectively promote the development of new industries, new models, and new drivers according to local resource endowments, industrial bases, and scientific research conditions, transform and upgrade traditional industries with new technologies, and actively promote high-end, intelligent, and green industries.

At the enterprise exchange symposium held in the same period, it can be clearly seen from the valuable experience of many enterprises that some private steel enterprises have adopted measures such as transforming and upgrading production lines, deepening the extension of the industrial chain, and actively expanding in the direction of diversification, to explore the cultivation of new quality productivity according to local conditions and measures to promote their own high-quality development. These efforts have achieved remarkable results and laid a solid foundation for the future sustainable development of the company.

Gong Sheng, president of Shagang Group, said bluntly at the meeting that in the development of new quality productivity, Shagang has focused on doing three things: First, the product structure faces the new market and new demand, and constantly adjusts and adjusts. Second, green and low-carbon. Environmental protection is the red line, safety is the bottom line, efficiency is the lifeline, everything must be done. The third is to face the future and do a good job of digital intelligence.

Li Huiming, general manager of Jingye Group, said that for the development of new quality productivity, Jingye Group has planned five transformation and upgrading lines to promote high-quality development: the first is the inward product upgrading and transformation; The second is to develop outward and actively integrate into the "Belt and Road"; The third is to extend and develop backward; Fourth, disruptive high-tech innovation; Fifth, green and low-carbon development.

Wu Yi, Secretary of the Party Committee and president of Yongzhuo Holdings, said that Yongzhuo Holdings focuses on the transformation and upgrading of traditional industries to cultivate new quality productivity, and is committed to high-end, intelligent and green development. Yongzhuo Holdings through the production line equipment upgrade, product structure adjustment, improve the proportion of superior special steel, and committed to the development of cutting-edge products, to solve the "neck" problem, the future will continue to improve the green and low-carbon level of products. At the same time, we will cultivate and strengthen non-steel industries and develop high-performance carbon fiber and LNG new energy industries.

In addition, Rongcheng Group positioned the hydrogen energy industry as a new track, Shaanxi Steel Group focused on the integration of a new generation of high-quality essence green number intelligent direct rolling technology and equipment industrialization system, Xuzhou Jinhong Iron and Steel led the intelligent and green technical innovation of electric furnace short process... These are the new quality of productive forces for private steel enterprises to build momentum and empower the vivid practice.

"Under the new situation, private steel enterprises should enhance the sense of crisis and sense of urgency, and actively adjust the product structure, adapt to market changes, and maintain the overall stability of production and operation; We should also accelerate innovation-driven development, develop new quality productivity according to local conditions, create new advantages, achieve new breakthroughs, maintain profitability, and cultivate core competitiveness." Jia Yinsong, secretary-general of the Metallurgical Chamber of Commerce, concluded.