Highlight 3: Energy supporting projects

The "Planning Outline" proposes to advance the energy revolution, improve the energy production, supply, storage and marketing system, strengthen domestic oil and gas exploration and development, accelerate the construction of oil and gas storage facilities, accelerate the construction of national trunk oil and gas pipelines, build smart energy systems, and optimize the layout of power production and transmission channels; Strengthen the construction of water conservancy infrastructure and improve the optimal allocation of water resources and the ability to prevent floods and droughts.

With the rapid development of my country's industrialization and urbanization, industrial enterprises and residents' demand for crude oil and natural gas consumption continues to increase. However, my country still has the problem of unbalanced oil and gas supply and demand resources. The insufficient pipeline transportation capacity limits the use of oil and gas resources in my country to a certain extent. Therefore, my country has issued a number of oil and gas pipeline construction policies.

Currently planned or under construction are West-East Gas Pipeline 4 and 5, New Gas Pipeline (Xinjiang Coal-to-Gas Export Pipeline Project) and LNG (liquefied natural gas) export pipeline projects. These projects will drive the growth of demand for pipeline steel and container steel. Therefore, steel traders are optimistic about the future pipeline steel and container steel markets.

Highlight 4: Building a strong manufacturing country

This year’s government work report puts forward that the focus of economic development should be on the real economy, and we should unswervingly build a strong manufacturing country; develop strategic emerging industries; accelerate the growth of a new generation of information technology, biotechnology, new energy, new materials, high-end equipment, New energy vehicles, green environmental protection, aerospace, marine equipment and other industries; promote the development of advanced manufacturing clusters.

Steel traders said that as the manufacturing industry develops towards high-quality and advanced manufacturing clusters, the demand for high-end steel will increase accordingly. According to statistics, my country's steel demand is mainly concentrated in the two fields of construction and machinery, of which construction accounts for 55% and machinery accounts for 16%. The steel used in the manufacturing industry is different from the construction industry. It is dominated by high-quality special steel, especially high-end steel, which has become more and more popular in the manufacturing industry in recent years.

According to the estimates of the China Machinery Industry Federation, the overall economic operation of my country's machinery industry in 2021 will show a trend of "high in the front and flat in the end", and the annual industrial added value growth rate will reach about 5.5%, and the steel consumption in the machinery field will also increase accordingly. 

In the future, my country’s manufacturing industry will accelerate the cultivation of smart manufacturing that applies digital technology, vigorously develop smart manufacturing equipment and products, and the demand for high-quality special steel for smart manufacturing equipment will increase substantially.

Highlight 5: Affordable Housing Project

This year's government work report and the "Planning Outline" both mentioned the affordable housing project: effectively increase the supply of affordable housing, improve the income distribution mechanism of land transfer; improve the long-term rental policy, and expand the supply of affordable rental housing.

A few days ago, the National Development and Reform Commission and the Ministry of Housing and Urban-Rural Development jointly issued the first batch of central budget investment plans for the affordable housing project in 2021, with a total amount of 29.693 billion yuan. The funds will be used to support the construction of supporting infrastructure for the transformation of old communities and shanty towns in 57 cities and towns. And this year's government work report also pointed out that government investment will be more inclined to projects that benefit a wide range of people's livelihoods, and new construction will be started to renovate 53,000 old communities in cities and towns to improve the level of public services in the county.

It is understood that the steel used in the affordable housing project and the renovation of the old urban community is mainly construction steel such as rebar and wire rod, which consumes a lot of steel. Generally speaking, the steel consumption per square meter of a high-rise building can reach 50 kg to 60 kg. The average area of each indemnificatory housing is at least 60 square meters and the minimum steel consumption per square meter is 50 kg. If 10 million sets of guarantees are built The amount of steel used for housing is at least 30 million tons. In view of this, this year, my country's affordable housing projects and the transformation of old communities in cities and towns contain a lot of demand for construction steel.

Highlight 6: Metropolitan area and urban agglomeration construction

This year's government work report proposes to develop and expand urban agglomerations and metropolitan areas, and implement urban renewal actions. Shortly before the National Two Sessions, the "Nanjing Metropolitan Area Development Plan" was formally approved. This is the country's first inter-provincial metropolitan planning approved by the National Development and Reform Commission. At the same time, the Urumqi metropolitan area in Xinjiang, the Xi'an metropolitan area in Shaanxi, the Wuhan metropolitan area in Hubei, and the Fuzhou metropolitan area in Fujian have also been launched.

The development of metropolitan areas and urban agglomerations is the largest structural potential for economic growth in my country. Steel traders suggest that market participants should pay attention to the construction of metropolitan areas and urban agglomerations in a timely manner, and seek business opportunities from them.