On July 28, at the second meeting of the Chairman of the Sixth General Assembly of the China Iron and Steel Industry Association, the relevant person in charge of the Planning and Development Department of the Iron and Steel Association gave a special report on the work of "looking back" on the reduction of steel capacity and the reduction of crude steel output. It introduced the relevant work of the relevant state departments and the steel association, the "look back" of steel capacity reduction and the problems that occurred in the work of reducing production, and put forward suggestions for the next step.

Cooperate with relevant ministries and commissions

"Look back" and reduce production capacity

As early as early January this year, the Iron and Steel Association began to cooperate with relevant departments to study and formulate a "look back" inspection of steel reduction capacity, and put forward specific recommendations not to implement a "one size fits all" approach to production reduction work.

In the process of the above work, the Iron and Steel Association actively cooperated with the formulation and revision of various policies such as strict control of new production capacity, capacity replacement, and project filing. After the new version of "Implementation Measures for Capacity Replacement in the Iron and Steel Industry" was released, the Iron and Steel Association promptly organized local authorities to hold a publicity and implementation meeting. The Iron and Steel Association researched and sorted out more than 100 clues collected on the whistleblower platform, and provided them to the inspection team as an important inspection content to "look back" to reduce overcapacity, completed policy compilation and policy guidance, organized and assisted in training more than 50 industries Experts participate in special inspections.

At the same time, the Iron and Steel Association took the initiative to communicate with the president and vice president units, solicit the opinions of some steel companies, actively reflect their demands, and promptly report and discuss relevant issues with the president units based on the situation they have. Based on the feedback from enterprises, the policy recommendations of “three restrictions, two unlimited” were put forward, and the policy recommendations on reducing production, import and export, and increasing domestic resource development were repeatedly fed back to the national decision-making department. The attention of relevant ministries and commissions and partial adoption.

The task of reducing production requires the joint efforts of all parties to achieve good results.

"At present, various ministries and commissions and industry experts have formed 9 inspection teams to carry out on-site inspections in 29 provinces (municipalities and autonomous regions) across the country. Some problems have also been discovered in the process, and rectification is being actively implemented," said the person in charge.

In the first half of this year, my country's crude steel output reached 563 million tons, an increase of about 60 million tons year-on-year. While the annual production reduction task will be concentrated in the second half of the year, the steel supply and demand gap in the second half of the year will have to be made up by measures such as substantially increasing the net import of crude steel and reducing the export of steel. The task is very arduous. How to ensure the stability of domestic steel prices, "non-reporting of false figures" and fairness to enterprises in the work of reducing output are greater challenges. "At present, all provinces (municipalities and autonomous regions) and central enterprises have successively begun to implement production reduction related work, but from the inspection process, it is learned that most enterprises are still in the start-up stage, and the grassroots and enterprises still have a wait-and-see sentiment to reduce production." The person in charge revealed, "At present, the Iron and Steel Association is organizing and studying the deduction of the balance of demand, production, import and export supply and demand after reducing production in the second half of the year."

Speed up research to ensure fairness and justice

Measures to reduce production

At present, the whole industry pays great attention to the work of reducing production, and some member companies have put forward suggestions such as avoiding “one size fits all”, ensuring fairness and justice for all market players, optimizing steel production restriction policies, and strengthening research and judgment on market trends after production reductions.

The person in charge put forward suggestions on the next step of reducing steel production capacity and "looking back" and reducing production:

First, the work of reducing output in an orderly manner is developing in a favorable direction. "Looking back" and reducing production capacity in steel production are strategic decisions made by the country after overall balance, which is conducive to maintaining a balance between resource supply and demand. The person in charge said: "A good balance is conducive to lowering the price of iron ore; a bad balance may be counterproductive. The key is to "a game of chess" for the entire industry to avoid a sharp rise in steel prices." Currently, the market is operating at a high level. Active production cuts are different from passive production cuts in 2015 when the entire industry was at a loss. Taking into account the demand situation of downstream industries in the second half of the year, taking into account the low and high demand of steel last year, steel demand may decline in the second half of this year. The reduction of production is also an initiative taken by the entire industry to adapt to changes in market demand. The person in charge suggested that the majority of steel companies should actively adapt, carefully arrange, and supervise each other, promptly report the problems and difficulties encountered, pay close attention to iron ore price trends, and ensure that steel prices are within a reasonable range.

The second is that iron and steel companies must actively do a good job in reducing output. First of all, iron and steel enterprises should actively adapt to the new situation, reasonably arrange and adjust the utilization and maintenance of equipment in accordance with the production reduction requirements, and focus on limiting iron output to achieve the purpose of limiting steel. Secondly, while suppressing production, iron and steel companies must promptly announce production reduction information to the public to guide iron ore market expectations and maintain stable market supply and demand. Third, steel companies must persist in reducing costs and increasing efficiency, maintain reasonable and stable market prices, increase the proportion of direct sales, prevent speculation, avoid large price fluctuations, and jointly maintain the smooth operation of upstream and downstream industries. Finally, steel companies must strengthen industry self-discipline, focus on meeting domestic demand, and further control steel exports, no longer export general products, and only maintain a small number of high-tech, high-value-added products.

The third is to pay close attention to the operation of the industry and make timely suggestions. First of all, the national level should further strengthen guidance on the implementation of production restriction policies in various provinces (municipalities and autonomous regions), and ensure that the restriction of illegal production capacity, high pollution production capacity, and high energy consumption production capacity is the focus of reducing production; at the same time, further strengthen demand-side management , To introduce measures to maintain the balance and stability of demand intensity and demand rhythm in downstream industries. Secondly, the Iron and Steel Association will strengthen research and organize seminars between steel companies and downstream industries to understand and study the implementation and expected effects of output reduction in a timely manner. Third, actively research measures to ensure fair and equitable reduction in output; analyze the changes in the "steel ratio" of various provinces (municipalities, autonomous regions) and enterprises on a monthly basis, study and judge the increase or decrease of actual crude steel output in various regions and enterprises, and reduce the occurrence of fraud. Cooperate with relevant state departments to organize spot checks in a timely manner. Finally, the Steel Association will strengthen market monitoring and timely release and analyze data on crude steel output, steel inventory, steel prices, iron ore prices and downstream industry operations, so as to promote the smooth operation and high-quality development of the steel industry.