How to better implement the spirit of the Party's 20 National Congress and the National Two Sessions into the development of the steel industry, so that the spirit of the meeting in the steel industry to take root, is the current industry's important task." On March 25, at the 2023 (14th) China Iron and Steel Development Forum, the Vice president of China Iron and Steel Association Luo Tiejun made "Accelerate the promotion of steel industry high-quality development, contribution to the Chinese style modernization" speech so emphasized.

 As for how the iron and steel industry should implement the spirit of the General Secretary's speech and firmly grasp the top priority of high-quality development, Luo Tiejun elaborated his views on capacity management, demand upgrading, resource security, green and low-carbon transformation and other aspects at the forum.

The governance of production capacity should promote the survival of the fittest and balance supply and demand

He said that in 2022, the iron and steel industry experienced a difficult period, the industry benefit declined significantly, the third quarter of that year even appeared the industry loss situation, the key statistics of iron and steel enterprises to achieve annual profit down 70%, sales profit rate is only 1.67%. This situation is caused by external factors such as weakening downstream demand and high raw fuel costs, but more by the unbalanced and inadequate development of the industry itself.

On how to build a new mechanism of capacity management, Luo Tiejun expressed his views. In the past two years, the focus of supply-side structural reform has shifted from "cutting overcapacity" to "controlling output". With changes in industry management methods, the main contradiction in the industry is also changing. The state emphasizes the reduction of capacity, so there are special-shaped furnace, batch small build large and other ways to expand the capacity of the problem; The implementation of output control in the past two years has resulted in data concealment and underreporting. How to regulate production capacity of iron and steel industry is worth further study. To this end, the association proposed to accelerate the establishment of a new mechanism for steel production capacity management under the new development environment, the purpose is to make steel production capacity in accordance with the market demand reasonable release.

He believes that the key to creating a new mechanism is to form a restraint on production capacity and output of the industry consensus mechanism, oriented to survival of the fittest, oriented to supply and demand balance. Of course, this cannot be separated from the guidance and supervision of the government and the self-discipline of the industry. It is more urgent to look forward to the early implementation of the national carbon emission regulation mechanism.

Three ways to promote the upgrading of steel consumption

While capacity governance addresses the supply-side issue, it also deserves attention on the demand-side, Luo said. Last December, the CPC Central Committee and The State Council issued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035), which calls for integrating the strategy of expanding domestic demand with deepening supply-side structural reform. "China's crude steel output has fallen for two consecutive years since reaching a historic peak of 1.065 million tons in 2020. What appears to be a production restriction is actually a drop in downstream demand." He was very emphatic.

In this year's council, the association proposed to launch the "steel application expansion Plan" with "material upgrading and material replacement" as the main direction of work, and comprehensively strengthen the upstream and downstream cross-industry cooperation. He suggested that the upgrading of steel consumption should be promoted from the following aspects: First, the promotion and application of residential steel structure should be promoted, and the application of high-strength steel, weather-proof steel and fire-resistant steel should be expanded in the field of steel structure construction. The second is to promote scientific and technological innovation in a coordinated way to "strengthen weaknesses, strengthen foundation and promote improvement", so that steel products with higher performance can be more widely used. Third, promote the use of green and low-carbon products to adapt to the pace of green and low-carbon consumption upgrading downstream.

Four measures to strengthen domestic iron resources supply

China has made remarkable achievements in supply-side structural reform and demand-side upgrading in recent years, but resource security issues that have long restricted the survival and development of the country's iron and steel industry have not been solved, Luo said. The Economic Work Council of the CPC Central Committee has made clear the need to "strengthen domestic exploration and development of important energy and mineral resources and increase storage and production". The 20th National Congress of the Communist Party of China proposed to enhance the ability to safeguard national security and ensure the security of food, energy and resources, as well as important industrial and supply chains. The iron ore external dependence of the steel industry has remained at 80% for nine consecutive years. Last year, with the support of relevant ministries and local governments, progress was made in the development of domestic iron ore projects under the Keystone Plan. A national, provincial and regional promotion mechanism was established, and the efficiency of handling project requirements was significantly improved. Construction of six projects, including the 10-million-ton Xianshan Iron Mine, has begun.

For the next step to strengthen resource security, he believes that the iron and steel industry should continue to grasp the supply of domestic iron resources:

First, we will speed up the construction of domestic iron ore projects and continue to promote the development of a number of iron ore projects with good resource conditions and strong cost competitiveness.

Second, we must ensure the normal production of existing mines. We call on government departments at all levels not to suspend production of all mines for rectification just because of an accident in one mine, so as to avoid the situation where "one person gets sick and everyone gets hospitalized".

Third, accelerate the development of overseas iron ore resources with conditions. Recently, good news has come from the Western Slope Iron ore project in Australia and the Simandou Iron ore project in Guinea, which has strengthened the confidence of domestic investors.

The fourth is to promote the recycling of scrap steel resources to provide raw material guarantee for the orderly development of electric furnace steel.

China's steel industry should continue to be a pioneer in achieving the goal of "double carbon"

According to Luo Tiejun, aiming at the core proposition of green and low-carbon transformation and development of the steel industry, the steel industry has carried out a lot of effective work:

First, the Carbon-Neutral Vision and Low-carbon Technology Roadmap for the Steel Industry has been published, which defines the dual-carbon goal and technology realization path for China's steel industry.

Second, the Global Low-carbon Metallurgy Innovation Forum was held to promote international cooperation on the low-carbon development of the steel industry and form a consensus on cooperation.

Third, it has launched the first EPD (Environmental Product Declaration) platform in China's industrial sector, actively connecting with upstream and downstream industries and promoting international mutual recognition.

Fourth, promote "extreme energy efficiency" and cultivate energy efficiency benchmarks, forming a three-year Action Plan for Energy Efficiency Benchmarks in the Steel Industry.

Fifth, we will continue to promote the world's most stringent ultra-low emission transformation project. By the end of February this year, 46 enterprises with a steel production capacity of 240 million tons had completed the whole process of ultra-low emission upgrading. Twenty-five enterprises with a steel production capacity of 160 million tons have completed some of the ultra-low emission upgrading, and the subsequent upgrading tasks remain arduous. "However, we have also made it clear that we oppose 'ultra-low' emissions, which goes against the requirements of law-based, scientific and precise pollution control and imposes additional burdens on enterprises, which is impractical and does not outweigh the benefits." He also noted that.

According to the theme of the forum "New Journey of Low-carbon Steel, New Era of Beautiful China", Luo Tiejun pointed out that in the next step, China's steel should continue to be a pioneer in realizing the goal of "double carbon", continue to promote green low-carbon and ultra-low emission transformation, and take active actions in carbon emission management, energy structure adjustment, hydrogen metallurgy application and other aspects, and take the lead in the breakthrough. Promoting green and low-carbon transformation of China's steel industry.