"In the face of complex business environment and market situation, under the strong leadership of the CPC Central Committee, the iron and steel industry has adhered to the complete, accurate and comprehensive implementation of the new development concept, rationally judged the market situation, actively adapted to market changes, taken multiple measures to reduce costs and increase efficiency, and maintained a relatively stable operation, playing an important role in stabilizing the development of the national economy and fully meeting the market demand." February 13th，At the fifth meeting of the sixth general meeting of the China Iron and Steel Industry Association, He Wenbo, member of the 13th CPPCC National Committee, secretary of the Party Committee and executive chairman of the China Iron and Steel Industry Association, reported to the meeting the industry operation and key work progress in 2022, and analyzed and discussed the current situation and key work tasks of the industry.

The overall operation of the industry in 2022 was stable

2022 is a very challenging year for the steel industry. Affected by the international political and security situation and the COVID-19 pandemic, the world economic recovery is weak, the domestic economy is under pressure, and the triple pressures of demand contraction, supply shock and weakening expectations continue to evolve. The steel industry is facing an extremely severe external environment. He Wenbo pointed out that in the face of difficulties such as weakening downstream demand, falling steel prices and rising raw fuel costs, the iron and steel industry resolutely implemented the overall deployment of the CPC Central Committee and The State Council of "stability is the priority, seeking progress while maintaining stability", adhered to the response policy of "rational market judgment, realistic concrete measures and positive overall response", paid close attention to reducing costs and increasing efficiency, and strictly controlled operating risks. Strive to maintain a dynamic balance between supply and demand in the market, and realize the overall stable operation of the industry.

He Wenbo gives such a set of data: first, steel production year-on-year decline, consumption intensity has weakened. In 2022, China's crude steel output was 1.013 billion tons, down 2.1 percent year on year and down for the second year in a row. In order to adapt to market changes, iron and steel enterprises take the initiative to control the pace of production, adjust the variety structure, and make efforts to achieve the balance of supply and demand. Second, the global steel market is depressed, and crude steel production outside China has fallen more than in China. In 2022, the world's crude steel production (64 countries and regions) was 1,831.5 billion tons, down 4.3% year on year, with China accounting for 55.3% of the world's steel production (64 countries and regions). Third, steel exports were basically flat year on year, while imports declined significantly. In 2022, China exported 67.32 million tons of steel, up 0.9% year-on-year; Cumulative steel imports of 10.57 million tons, down 25.9 percent year on year, the lowest level of steel imports since 1993. Driven by the high price in the international market, the import and export prices of Chinese steel rose year-on-year, among which the average export price was 1,434 USD/ton, up 17.7% year-on-year. The average import price was $1,617 per ton, up 23.2 percent year on year. Fourth, steel prices from rising to falling, fuel costs increased significantly. In 2022, the annual average of CSPI China steel price composite index was 122.78 points, down 13.55% compared with the same period last year. The overall shock went down and the trend of stabilization and recovery appeared at the end of the year.

"You don't know how hard it is until you go through it. He Wenbo said that in 2022, the steel industry faced severe market challenges, the whole industry withstood the operating pressure, and all key work made new progress. For example, we focus on the key, make good Bridges, and maintain the stable operation of industrial chain and supply chain; Substantive progress in the Cornerstone Program; Resource integration, merger and reorganization, iron and steel industry concentration further improved.

Supply and demand are expected to remain flat in 2023

In 2023, the external environment faced by the steel industry will remain complex and severe. He Wenbo said the country will further strengthen and improve macro-control on the basis of continuing to coordinate epidemic prevention and control and economic and social development. The national economy is expected to operate within a reasonable range and the situation of steel production and demand will remain stable.

Internationally, global economic growth has slowed down, and steel consumption has narrowed. In 2023, although the global supply chain situation will improve, the global economic recovery will slow down due to the impact of high inflation, higher energy prices and monetary tightening policies, and the growth of steel demand in the international market is not optimistic. From the domestic point of view, the domestic economy is stable, steel supply and demand is expected to remain stable. As the effects of policies and measures to stabilize growth gradually emerge and the impact of the COVID-19 epidemic eases, the pent-up demand for consumption and investment will be released and the vitality of the Chinese economy will be further released, which will support steel consumption. However, the continued downturn of the real estate market and the slowdown of manufacturing export growth may drag down steel consumption. The domestic steel market supply and demand is expected to remain relatively stable in 2023.

He Wenbo specifically analyzed the steel demand of the downstream industry in 2023:

First, the downward trend of real estate steel is slowing down, and steel for infrastructure construction is still playing a supporting role. Because the real estate industry commercial housing purchase and capital reinvestment willingness is difficult to significantly improve, the probability of a "slow bottoming, slow recovery" situation. Infrastructure construction is an important way of counter-cyclical adjustment. Due to its large volume of infrastructure projects, long construction period and long release period of related physical demand, the physical workload that was not completed last year due to the impact of the epidemic will continue to be implemented in 2023, and the demand for steel for infrastructure will continue to grow.

Second, the machinery industry maintains steady growth, and the overall steel use will be stable and have a decline. From the perspective of global demand, the growth of machinery industry will maintain growth in 2023. In addition to the update cycle of its own equipment, it is greatly affected by the investment cycle of infrastructure, real estate and so on. In general, the machinery industry belongs to a relatively good supply and demand pattern in the big cycle industry.

Third, the automobile industry maintains growth, driving the steady demand for automobile steel. Auto sales are expected to reach 28 million in 2023, and steel demand for support is expected to remain stable.

Fourth, the domestic shipbuilding industry is expected to be stable, the container market decline. Influenced by aging of existing ships, emission reduction pressure brought by new environmental protection regulations, reshaping of global trade routes and increasing turnover demand due to geopolitical influences, the shipbuilding industry will maintain a stable situation in 2023, and the demand for shipbuilding steel will also increase accordingly. At the same time, the rapid development of domestic multimodal transport, transit rail and the development of China-Europe freight trains will support the demand for containers to some extent. The overall demand for container steel is expected to increase steadily and slightly in 2023.

Fifth, the demand for home appliances is expected to pick up, and the demand for steel remains stable. China is a big exporter of home appliances, and the export of household appliances accounts for about 40% of the output. As the pace of world economic recovery slows down, affected by high inflation and interest rate rise, the demand for overseas home appliances increases significantly, which will seriously affect the export of home appliances. Overall, steel demand for home appliances is expected to be stable.

Strive to create a new situation of high-quality development of the iron and steel industry

Talking about the key work tasks of the industry in 2023, He Wenbo said that the Party's twenty major science plans the goals and tasks and action programs of the development of the cause of the Party and the country in the next five years, and also provides fundamental compliance and target guidance for the high-quality development of the iron and steel industry. To be specific, do seven things.

First, strengthen and improve the industrial operation monitoring system, strive to achieve stable operation of the industry. We will strengthen monitoring and analysis of economic operations, carry out forward-looking studies in accordance with the requirements of "stabilizing production, ensuring supply, controlling costs, preventing risks, improving quality and stabilizing performance", and promptly identify problems, put forward suggestions and take measures to help industries improve operation quality and economic performance. Strengthen data governance, promote data legislation, build data confidence, and lay a data foundation for the governance of the industry; Organize the industry to carry out multi-dimensional bid exploration potential, strengthen international bid evaluation, expand the scope of bid evaluation, improve the pertinence and effectiveness of the target, and provide valuable reference for member enterprises to improve their operations.

Second, actively study and promote the two basic measures, continue to optimize the operation order of the industry and improve the industry development environment. On the basis of the itinerant office of the chairman unit in this round, we will continue to listen to the opinions of the member units, improve the specific opinions and plans as soon as possible, actively communicate and coordinate with the relevant ministries and commissions of the state, timely propose and constantly optimize the solutions, promote structural adjustment and layout optimization, guide the survival of the fittest, and guide the balance of supply and demand.

Third, we will continue to promote green and low-carbon development through the three major renovation projects. We will unswervingly advance the ultra-low emission transformation project and complete the transformation plan according to the set targets. On the one hand, we should actively plan and promote the transformation project of extreme energy efficiency. On the other hand, we should strengthen systematic planning, accelerate the overall layout of low-carbon development, and carry out systematic low-carbon work to support the carbon peak of the industry and the realization of the goal of carbon neutrality.

Fourth, we will implement the development plans for the two major industries to consolidate the industrial foundation and expand the space for industrial development. We will continue to implement and plan the "Cornerstone Plan" for upgrading, launch the "Steel Application Expansion Plan" with "material upgrading and material substitution" as the main direction of work, and comprehensively strengthen cross-industry cooperation in upstream and downstream areas. At the same time, we should coordinate the two markets and two kinds of resources, strengthen the tracking of overseas resource development projects, provide classified guidance to continuously promote the development of domestic iron ore resources, and establish a full life cycle iron ore strategic guarantee mechanism integrating "prospecting, construction and operation".

Fifth, we will work together to promote innovation in key technologies and products, and promote the commercialization and application of achievements. We will improve the industry-university-research-application-oriented collaborative innovation system, increase investment in scientific and technological innovation and R&D, and enhance our capacity for independent innovation. We will comprehensively promote scientific and technological innovation to "strengthen weaknesses, strengthen foundation and promote improvement", concentrate on overcoming a number of "bottleneck" steel materials and core technologies, take the initiative to win policy support, and promote the research and development of generic technologies of hydrogen metallurgy in the industry. Implement the "Shanghai Consensus" of the director of the Enterprise Research Institute, select areas to enter, and pilot the mechanism of collaborative research and development of generic technologies.

Sixth, we will carry out pilot demonstrations, popularize generic technologies, and strive to improve the level of intelligent manufacturing in the industry. To organize the promotion of intelligent manufacturing in the iron and steel industry. Through the pilot demonstration work of digital transformation of iron and steel enterprises, continue to select a batch of replicable and popularizable 2023 version of intelligent manufacturing in the steel industry excellent scenarios and excellent solutions, and organize the research and development and promotion of digital and intelligent generic technologies. We will promote the upgrading of key generic technologies for digital intelligence across the industry, such as smart equipment, low-carbon energy conservation, production safety, and modern supply chains.

Seventh, strengthen the positive publicity, and strive to maintain and enhance the image of the industry. Give full play to the platform role of the Publicity and Exchange Working Committee, continue to increase the industry's positive publicity, continue to promote the implementation of the Action Plan to Strengthen the Steel Industry Publicity and carry out the industry Image Improvement Project, and strive to play the synergistic effect of industry publicity.