“The new crown pneumonia epidemic is still spreading globally, and the international market environment will become more complicated in the future. The steel industry is facing difficulties such as shrinking international demand, significant decline in exports, and rising prices of raw materials and fuels. Faced with opportunities and challenges, the entire industry must concentrate on doing well. The road to high-quality development.” On November 28, Qu Xiuli, Vice President and Secretary-General of the China Iron and Steel Industry Association, addressed the current industry’s challenges at the 16th China Steel Industry Chain Market Summit and Lange Steel Network 2020 Annual Meeting. The problems and future development directions shared their views. 

According to Qu Xiuli, since the beginning of this year, in the face of the impact of the epidemic, the steel industry has conscientiously implemented the Party Central Committee’s “controlling the epidemic and stabilizing the epidemic, with the support of a series of macro policies such as national economic stabilization, tax reduction and fee reduction, and resumption of production. "Operation" requires two-line operations to maintain a good overall operating situation, providing important support for my country's economic recovery.

One is the rapid recovery of domestic market demand, and steel production has maintained growth. Judging from the situation in the first 10 months of this year, my country’s main macroeconomic indicators and downstream industry operations have shown a trend of improvement month by month. Most indicators have turned from negative to positive, which has driven the growth of steel production. "From the perspective of the average daily output of crude steel, last year did not exceed 3 million tons, but this year has exceeded 3 million tons. It is estimated that crude steel output will reach 1.05 billion tons this year, an increase of about 5% over last year." Qu Xiuli said.

The second is the decrease in demand in the international market, the decline in steel exports and the increase in imports. In the first 10 months of this year, my country exported 44.43 million tons of steel, down 19.3% year-on-year; imported 17.01 million tons of steel, up 73.9% year-on-year. Qu Xiuli believes that this pattern of steel imports and exports shows that domestic demand and price levels are better than those of foreign countries. It is expected that steel exports will fall by 16% this year and steel imports will increase by 60%.

Third, steel prices rebounded slightly, generally lower than the same period last year. Since the beginning of this year, steel prices have generally shown a slight rebound from a low level, down 4.83% compared with the same period last year. At the same time, in the first 10 months of this year, the price of flat products fell by 3.67% year-on-year, and the price of long products fell 5.96% year-on-year. Qu Xiuli believes that the formation of the "long-weak and strong board" pattern is related to the changes in the national investment structure in recent years and the rapid recovery of the manufacturing industry this year.

Fourth, the efficiency of steel enterprises has gradually improved, which is generally lower than last year's level. The monitoring data of the Steel Association shows that since the beginning of this year, the sales revenue of steel enterprises has increased, but the cost is also increasing, and the increase in cost is greater than the increase in sales revenue. Overall, the efficiency of steel enterprises has declined. In the first 10 months, corporate profits fell by 4.5% year-on-year, and the industry's average sales profit margin fell to 4.1%.

Fifth, the green development of the industry, energy conservation and emission reduction have achieved results. Qu Xiuli said: “While responding to the epidemic and stabilizing production and operation, steel companies adhere to green development, actively carry out energy saving and consumption reduction, ultra-low emission transformation, environmental protection and other work, and energy saving and consumption reduction indicators have been further improved.” According to statistics, before this year In 10 months, the comprehensive energy consumption per ton of steel decreased by 0.53% year-on-year, the new water consumption per ton of steel decreased by 4.51%, the sulfur dioxide emissions per ton of steel decreased by 23.85%, and the emissions per ton of steel fume and dust decreased by 17.5%.

Qu Xiuli expressed his views on the future development trend and direction of the steel industry.

One is that my country’s economy continues to grow, and market demand is expected to stabilize. The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China clearly stated that we should insist on expanding domestic demand, unblocking the domestic cycle, forming a strong domestic market, and promoting domestic and international dual cycles; optimizing the investment structure and maintaining reasonable growth in investment; and promoting the construction of "two new and one heavy" major projects . Qu Xiuli said: “From a macro policy perspective, demand is expected to remain stable next year. Generally speaking, steel prices will not fall sharply due to cost constraints, and will not rise sharply due to output constraints. For steel companies, on-demand production is The key to keeping the industry running smoothly."

The second is the gradual recovery of the global economy, and the international trade environment will remain complicated. In Qu Xiuli's view, my country's steel exports are expected to reverse the downward trend, but considering that the global epidemic has not yet ended, international trade protection will continue for a long time, and it is difficult for exports to grow sharply.

Third, the price of raw materials and fuels remains high, and the task of improving efficiency is arduous. Since the beginning of this year, the price of imported iron ore has continued to rise. As of November 20, the price of imported iron ore has risen by 41.7% from the beginning of this year, while the price of steel has only increased by 6.5% during the same period, and the price of imported iron ore is obviously higher. Qu Xiuli explained: “The price of imported iron ore is affected by factors such as the capital market, foreign mine monopoly, and strong domestic demand, making it difficult to decline. Therefore, the industry must vigorously reduce costs and increase efficiency next year to achieve profit growth.”

Fourth, the steel industry must adhere to the path of high-quality development. Qu Xiuli proposed that the high-quality development goals of the steel industry in the future mainly include building innovative steel, building low-carbon green steel, deepening supply-side structural reforms, building sustainable steel, and building international steel. Especially with regard to deepening the supply-side structural reform, Qu Xiuli said: “The supply-side structural reform of the steel industry is not only a problem of total volume, but also a structural problem, but also a problem of industrial concentration. These are the issues that our industry should focus on in the future. Direction."