Constructing a new development pattern Good steel should be used on the “blade”-Interview with Luo Tiejun, Vice President of China Iron and Steel Association

“Under the new development pattern, the steel industry must capture new opportunities in the future from forming a new balance of domestic supply and demand and participating in high-level international cooperation and competition.” Luo Tiejun, vice president of the China Iron and Steel Association, said in an exclusive interview with Xinhua News Agency recently. The refinement of the supply-side structural reform of the “13th Five-Year Plan” has withstood the stress test of the special year of 2020. The steel industry, which is standing at the new development starting point, will continue to resolutely reform and gradually improve the basic capabilities of the industry and the modernization level of the industrial chain. Take scientific and technological innovation as the starting point to improve the quality and level of supply, and let good steel be used in the “blade”.

“I didn’t expect it!” Luo Tiejun recalled the past 2020, “I am really worried that the company’s capital chain will break and the industry will lose money. As a result, there is no loss in a month. It is just a matter of how much profit.”

China Iron and Steel Association data show that in 2020, the profits of steel companies included in the key statistics have been increasing year-on-year from June, and the asset-liability ratio has continued to decline year-on-year. The total profit achieved throughout the year has maintained growth.

“In the past year, the continuous recovery of China’s economy has driven the steel industry to exceed expectations.” Luo Tiejun said, “Another important point is the supply-side structural reform. In the past few years, steel companies have made money and their capital situation has greatly improved.”

Luo Tiejun believes that the steel industry has demonstrated strong anti-risk capabilities thanks to the unswerving advancement of supply-side structural reforms and the complete industrial chain advantages accumulated over the years.

These advantages will be confirmed in 2020 when the global epidemic is spreading. In 2020, on the one hand, my country’s steel industry has played an important role in emergency supply, medical assistance, resumption of work and production, and stabilization of the industrial chain supply chain; on the other hand, the demand and production volume of China’s steel industry both hit record highs At the same time, it has led to a substantial increase in steel imports, and a phased net import of crude steel has begun to form from June.

“As the world’s largest steel producing country, China not only did not put pressure on the world’s production capacity, but provided a broad market for digesting the world’s steel production capacity,” said Luo Tiejun.

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Looking back at the extraordinary 2020, my country’s steel production continued to run at a high level driven by strong downstream demand, demonstrating the strong resilience of my country’s economy; at the same time, the price of imported iron ore fluctuated sharply, once again hitting the pain points of the industry. The joys and worries of the iron and steel industry are just a profile of my country’s entry into a new stage of development and new changes in opportunities and challenges.

Standing at the new starting point of the “14th Five-Year Plan”, how can the steel industry make up for its shortcomings and make a good start?

Luo Tiejun pointed out that the impulse for capacity expansion, increasingly tight ecological environment constraints, high dependence on external resources, and low industry concentration will still be challenges facing the steel industry for some time to come. “The steel industry still has shortcomings to make up for in accelerating the construction of an industrial basic capability system and building a modern industrial chain.”

“Optimizing the industrial layout is very important to consolidate the industrial foundation capacity. Due to the constraints of iron ore resources, in recent years, my country’s new steel companies are more inclined to develop along the coast.” Luo Tiejun said, this is the coastal area’s port conditions, logistics costs, and raw material guarantee The inevitable result of many advantages such as environmental capacity.

But he also pointed out that optimizing the industrial layout of the iron and steel industry cannot be “swarmed.” The double bottom line must be the regional market demand space and resource and environmental capacity, and the balance of the entire industrial layout must be considered based on whether the upstream and downstream of the industrial chain can be fully linked.

“The steel industry must change the traditional self-sufficiency concept, reduce the export of general products, encourage the import of primary steel products such as billets, and reduce energy and iron ore consumption.” Luo Tiejun said that the steel industry will deepen the supply-side structural reform and resolutely suppress the reduction. Crude steel production capacity, deep cultivating green and low-carbon development path, leading a new domestic supply and demand balance with high-quality supply, and participating in high-level international cooperation and competition.

Luo Tiejun said that with the introduction of a series of related policies and system improvements such as capacity replacement, the import of recycled steel raw materials, and carbon peaking, the iron and steel industry should use the means of promoting mergers and reorganizations and improving the recycling system of scrap steel resources to rationally deploy coastal and inland areas. Production capacity, steadily promote international production capacity cooperation, gradually improve the basic capabilities of the industry and the modernization level of the industrial chain, and use scientific and technological innovation as an important force to improve the quality and level of supply, so that good steel can be used as a “blade”.

Facing the future, what is a “blade” for the steel industry?

Luo Tiejun said that it is necessary to seize opportunities based on the strategic basis of expanding domestic demand. With the vigorous development of the 5G+ industrial Internet, my country’s investment in new infrastructure and advanced manufacturing continues to increase, which continues to inject new impetus into the upgrading of steel demand in downstream steel industries such as automobiles, home appliances, and smart products.

“The merger and reorganization of the upstream and downstream industrial chains is a new demand for the steel industry to realize the development of the industry under the new development pattern.” Luo Tiejun emphasized that it is necessary to speed up mergers and reorganizations within the industry, and continue to promote innovative cooperation with upstream and downstream enterprises in the industrial chain to strengthen upstream Downstream enterprises and research institutes collaborate to innovate to meet the ever-increasing new needs of users and extend and strengthen the industrial chain.

He said that the “Belt and Road Initiative” leads to a higher level of opening up, and it also brings new opportunities for steel companies to “go global”. The steel industry has the characteristics of high investment intensity and strong industrial relevance, and it is an indispensable participant in the high-quality joint construction of the “Belt and Road”.

“International capacity cooperation is one of the important ways for China’s steel industry to seek transformation and upgrading.” Luo Tiejun said that steel companies must fully grasp the opportunity of reshaping the global industrial chain, and at the same time rationally evaluate the space for international capacity cooperation, increase coordination and cooperation, and identify Cooperative positioning, strengthen risk prevention, and strive to create new international competitive advantages with high-level international production capacity cooperation.

Post time: Jan-05-2021
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