Since the beginning of this year, under the influence of the Federal Reserve's interest rate hike, the conflict between Russia and Ukraine, the rising price of raw fuel, and the influence of the epidemic and the downward trend of the real estate industry, the domestic steel market demand has been on the decline, and the contradiction between supply and demand is prominent. As a result, the steel price has fallen, the pressure of enterprise capital and environmental protection has been on the rise, and the economic benefits have turned from profit to loss. The development situation is very severe. Faced with the double pressure of falling demand and oversupply, some domestic steel enterprises have actively responded to the challenges, practiced internal skills, improved quality and efficiency, and accelerated the transformation and upgrading of enterprises, thus forming many good practices and experience.

First, we will vigorously develop green and low-carbon high-end products

China Baowu concentrated its research and development strength, and intensively released 7 high-grade oriented silicon steel products, including B18P080, B18R060, 35Q155-Z, B18R055, B20R060, 35Q155-Y and B23HS075, which are used in the field of UHV and new energy vehicles. Tightly grasp the mobile terminal market demand, the launch of 0.07mm ultra-flat stainless steel precision strip and non-textured surface stainless steel precision strip; Production limit specification H1109 mm ×461 mm ×21 mm ×40.5 mm, used for wharf shore wall heavy H-beam, break foreign monopoly. Angang Group actively carries out research and development work based on green manufacturing. On the one hand, it produces high-performance carbon structural steel and high-end products such as fine and ultra-fine crystal steel with long life and low cost. On the other hand, we will promote the research and development of new advanced structural materials, composite materials and common basic materials. Shougang Group focused on developing two types of high-value-added steel varieties such as 20SW1200H and ESW1230 for new-energy automobile electrical steel, "Silk Steel" for high performance Fe-chromium-aluminum fiber silk for exhaust gas purification, and "Canyi Steel" for ultra-thin wide-width strip steel for 5G equipment, providing high-quality products for energy saving and carbon reduction and new infrastructure construction. Hesteel Group has jointly built a green low-carbon iron supply chain with downstream automobile enterprises, developed and produced low-carbon emission ultra-high strength automobile steel products, and promoted the linkage of carbon reduction between the steel industry and the automobile industry. Citic Special Steel aims at the needs of domestic aerospace, nuclear power and other high-end manufacturing scenarios, and increases the research and development, production and marketing of high-performance special steels such as "three high and one special" (high-temperature alloy, ultra-high strength steel, high-quality die steel and special stainless steel). In the first half of 2022, CITIC Special Steel's sales volume of "three high and one special" products increased significantly, among which the sales volume of high-strength steel increased by 40% year on year and the sales volume of special stainless steel increased by 75% year on year.

Second, strengthen enterprise internal management

Nangang fully relies on its complete internal business information system and external data resources, builds a unified and standardized risk control data mart on the basis of big data warehouse, and builds an intelligent risk control platform integrating "risk information collection, risk assessment, risk management strategy formulation, risk response and solution, supervision and improvement" to realize dynamic monitoring and automatic warning. Realize the whole process, full coverage, the whole chain of intelligent risk control management. Based on the efficient information processing system, Shagang Group organically integrates the production and scheduling information. On the one hand, it integrates the production data collection platform to realize real-time monitoring, full traceability, comprehensive statistics and multi-angle analysis of key process quality data. On the other hand, it establishes the whole life cycle scheduling plan for materials and products, and tracks inventory, scheduling, tracking and purchasing information in real time. It is in the forefront of the industry in terms of intelligent logistics scheduling. In the first half of 2022, Shagang reported revenue of more than 88.36 billion yuan and net profit of 3.99 billion yuan. Yongfeng Iron & Steel firmly implements the policy of "lean operation + lean intelligence". Firstly, through accurate control of furnace temperature and accurate tracking of single billet status, the energy consumption per unit product is reduced by 22.8% and the rolling process cost is saved by 18.118,800 yuan. Secondly, by carrying out lean operation, we can enhance employees' awareness of overall energy saving and standardization. In addition, the company has developed 10 industrial standards, 2 local standards and 3 group standards through lean operation practice cases, becoming a model of enterprise management innovation in Shandong Province.

Third, accelerate industrial integration and extension

Relying on its complementary advantages in steel, coking and chemical industries, Jinnan Iron and Steel has built a closed-loop low-carbon industrial chain of "steel-coke, chemochemical and hydrogen". By synthesizing chemical products by blast furnace, converter and coke oven gas, Jinnan Iron and Steel can produce 300,000 tons of ethylene glycol and 150,000 tons of liquefied natural gas annually, achieving the goal of carbon sequestration and increasing the added value of products. It can sequestration about 2 million tons of carbon every year. Through the construction of arc photovoltaic building integration project, Longten Special Steel actively explores the carbon neutral path of "photovoltaic + steel", realizes the goal of "self-use of energy, surplus electricity online", can provide about 48.5 million KWH of clean electricity annually, reducing carbon emissions of about 38,000 tons. China Baowu TISCO Group in accordance with the concept of cross-border integration of "stainless steel + technology" and "stainless steel + culture", according to the personalized needs of customers, launched highly featured "hand-torn steel", nib steel, carbon fiber and other high-end stainless steel products and new materials, improve the added value of stainless steel products, extend the stainless steel industry chain.

Fourth, we will strengthen the management of capital and financial costs

By deepening the bid-searching, strengthening cost and expense control, normalizing and systemizing cost reduction, Baosteel continued to improve efficiency and efficiency, and achieved a revenue of 279.2 billion yuan and a net profit of 9.464 billion yuan in the first three quarters of 2022, outperforming the market. Hunan Valin Iron & Steel Co., LTD., focusing on 8 fields such as strategic management, financial management and scientific and technological innovation, has implemented 38 world-class management improvement projects against the benchmark. At the same time, through the comparison and learning between the main subsidiaries, the technical and economic indicators are continuously improved, the process costs are constantly reduced, and the management efficiency is further improved. In the first three quarters of 2022, Hunan Valin Iron & Steel Co., Ltd. achieved a revenue of 124.8 billion yuan and a net profit of 5.131 billion yuan. In the face of the severe market environment, Shougang Co., LTD took measures to reduce the financial burden by increasing the pressure on interest-bearing liabilities, putting an end to high steel inventories, and insisting that "cash is king". In the first three quarters of 2022, the company achieved a revenue of 91.68 billion yuan and a net profit of 1.78 billion yuan. Yongxing Materials takes multiple measures to reduce costs and increase efficiency. First, it strengthens the control of foreign investment, actively distributes new energy business, and significantly improves the profit level. The second is to optimize the marketing strategy, greatly reduce the sales expenditure; The third is to reduce product inventory, shorten the cash flow turnaround time, effectively save operating costs. In the first three quarters of 2022, Yongxing Materials achieved total revenue and net profit of 10.87 billion yuan and 4.271 billion yuan respectively, with year-on-year growth of 120.76% and 675.97% respectively.

Fifth,The pace of mergers and reorganizations was accelerated

On June 22, Angang announced the restructuring of its shares in Lingsteel. After the completion of the merger, Angang's crude steel production capacity will increase from 63 million tons to 69 million tons, an increase of nearly 10 percent, further enhancing its ability to resist risks. On October 16th, China Baowu held 51% of the equity of Xinyu Iron and Steel by signing the free transfer agreement. Through joint restructuring and professional integration, it achieved the goal of product quality improvement and increment, laying the foundation for building a world-class technological innovation, industrial investment and capital operation platform in the steel field. On October 19, Shagang Group plans to acquire 60% of the equity of Nanjing Nangang Iron and Steel Joint Co., LTD. The steel production capacity will reach about 50 million tons, an increase of nearly 25%, and the research and development capacity of medium and thick plate products will be significantly enhanced. On October 25, Jingheng Group successfully acquired Yubei Iron and Steel, and started to enter the field of electric furnace short process steelmaking. Since the beginning of this year, Jianlong Group has actively participated in the reform of state-owned enterprises, holding 5% of Bensteel Group and 11% of Anshan Thermal Energy Institute of China Steel. The move further improves Jianlong's upstream and downstream industrial chain and strengthens its research and development capability in the field of low-carbon metallurgy.

Sixth, actively carry out international cooperation on production capacity

In June 2018, Jianlong Group acquired and upgraded the Donggang Project in Malaysia. Donggang Group is a comprehensive steel enterprise integrating coke, iron making, steel rolling, ferroalloy and power generation. The first phase is planned to have a production capacity of 3 million tons, and some projects have been put into production. The second phase will start construction in March 2022. This project becomes the first overseas project of Jianlong to go abroad in response to the Belt and Road Initiative. Tsingshan Industrial has been deeply engaged in the Zimbabwean market. Since 2012, when it invested in the ferrochrome smelter, it has built two projects, namely a ferrochrome smelter and a coke plant, and the General carbon steel project is under construction. These and other upstream and downstream industries will form the Zimbabwe Steel Park, which will be worth billions of dollars. In April 2018, Delong Holdings started construction of Indonesia's Deshin Steel Group, a key project of the Belt and Road Initiative invested by Delong Holdings in Central Sulawesi Province of Indonesia. The current production capacity of the project is 7 million tons, the main products are bar, wire and part of the billet, the future production capacity will be gradually expanded to 20 million tons/year. Ningbo Yongjin set its sights on Southeast Asia, and built new deep processing projects of stainless steel in Vietnam, Thailand and Indonesia respectively, with a total capacity of more than 1.2 million tons. The products involved precision stainless steel strip and wide cold-rolled stainless steel strip, etc., and the profit level of tons of steel is more obvious than that of China. In January 2022, Jiangsu Delong Nickel Industry completed the signing of Phase III project of Delong Industrial Park in Indonesia, which plans to build a production line of nickel-iron with an annual output of 1.8 million tons. Indonesia Delong Industrial Park, located in Sulawesi Island, Indonesia, is the first nickel-iron and stainless steel industrial park of Jiangsu Delong Nickel Industry overseas. The first and second projects have been included in the key project database of the Belt and Road Initiative jointly built by China and Indonesia and the national strategic project of Indonesia, which was officially put into production in 2017 and 2020 respectively. Now it has an annual output of 600,000 tons of nickel iron, 2.5 million tons of stainless steel capacity. In 2022, Nangang made every effort to promote the process of internationalization, and built an overseas coke production base with an annual output of 6.5 million tons in Qingshan Industrial Park, Indonesia. The first coke oven of the project was successfully produced on May 7, 2022.