On July 26, with the theme of "high-quality development and sustainable development", the eighth Shaanxi Jinchuan Gan (Yunguiyu Ning Qingxin) construction steel enterprises Summit Forum was held in Neijiang City, Sichuan Province, and Hu Zhichun, general manager of MCC CDI Shares, made a keynote speech on "Facing the future and building the core competitiveness of enterprises".

The picture shows Hu Zhichun

The development of the steel industry presents six characteristics

For the current development trend of the steel industry, Hu Zhichun said that at present, China's steel industry has entered a stage of transformation and upgrading, and is in a critical period of deep adjustment, and the industry is facing a series of changes such as market, policy, new technology and pattern adjustment.

Specifically, the current development trend of the steel industry presents the following six characteristics.

First, demand in both domestic and foreign markets has declined, and operating and competitive pressure has existed for a long time. From the domestic point of view, although the domestic steel demand has increased in the past 10 years, from 2020, there is a downward trend, and the future downward trend is more obvious. From abroad, in the past 10 years, overseas new production capacity has developed rapidly, since 2014, in some emerging markets such as Southeast Asia and India, a large number of new steel projects have been put into production. "According to our statistics, more than 100 million tons of capacity are being implemented or planned to be implemented in Asia between 2023 and 2025." Hu Zhichun pointed out.

Second, the downstream demand structure continues to adjust, and the production capacity of new products and product quality requirements are improved. With the structural adjustment and high-quality development of the downstream industry, the amount of steel used in various fields, steel varieties and the demand for steel with different properties have changed. Specifically, the demand for steel in infrastructure, real estate and other fields has declined, the demand for steel in new energy and other fields (such as electrical steel, hot rolled coil and pipe) has increased, and the national industrial upgrading has driven the demand for steel in high-end manufacturing fields (such as high corrosion resistance, high weather resistance, high cold resistance and other products).

Third, the differences brought about by the modernization and large-scale equipment are gradually reduced. Since 2017, more than 300 million tons of iron production capacity and 400 million tons of steel production capacity have been updated, that is to say, the vast majority of enterprises have been "armed to the teeth", and enterprise competition is gradually changing from "hardware" to "software".

Fourth, differentiated production regulation policies will be gradually improved and further implemented. For example, since 2004, the scope of differentiated electricity price control in China has become wider and wider, from categories such as differentiated elimination categories, gradually developed to energy consumption control, and then developed to the current differentiated management and control based on comprehensive environmental performance indicators. Facing the future, the national regulation and control policies will be more accurate, and some regulation and control policies based on the comprehensive evaluation indicators of enterprise development will gradually land.

Fifth, the pressure for green and low-carbon development continues to increase, which also brings important opportunities for transformation. On the one hand, with the approach of the global net zero emission time, the implementation of CBAM, the domestic CCER (national certified voluntary emission reduction) is expected to restart, etc., the carbon emission cost of steel products will gradually increase, while the low-carbon development of downstream industries for low carbon steel demand is also continuing to increase, the steel industry low carbon development pressure is huge. On the other hand, under the pressure to promote, in recent years, China's steel low-carbon technology and intelligent technology development by leaps and leaps, the rapid formation of industrial applications, for the industry to enhance the core competitiveness, rapid transformation and upgrading to lay a solid foundation, and rebuild the core competitiveness of steel enterprises.

Sixth, the industry competition pattern continues to adjust, gradually forming an "olive-shaped" pattern. That is to say, the head of the "main force" steel enterprises (China Baowu, Angang and other steel enterprises with large scale as the main characteristics) will become bigger and bigger; The professional steel enterprises in central China (CITIC Special Steel, Qingshan Holdings, Jingye Group, Jianlong and other specialized enterprises) will become more and more specialized, and gradually extend the upstream and downstream industry chain; The competition between small and medium-sized steel enterprises that meet the low-end consumer demand will become increasingly fierce and the number will gradually decrease.

How to further enhance the core competitiveness?

"Based on the above development trend, facing the future, how should steel enterprises further enhance their core competitiveness?" Hu Zhichun believes that the following factors should be paid attention to.

In 2022, the overall profit level of the steel industry will weaken, and enterprises will face greater survival pressure. But even in these circumstances, some companies have turned a profit. According to statistics, the profits of several leading enterprises remain between 200 yuan and 500 yuan per ton of steel. The reason for the better profit is that it excavates and improves its core competitiveness. Hu Zhichun pointed out that the overall profit level of steel enterprises in the western region is lower than that of other regions, and the profit level in the eastern region is higher. The reason is that in the last round of structural adjustment, most steel enterprises in the eastern region have made deep adjustments in products, layout, equipment, processes, energy utilization, logistics, digitalization and other aspects, and tapped out competitive advantages. "In the future, western steel enterprises should find the direction of development and find the breakthrough point of competitiveness improvement." On the one hand, it is necessary to practice internal skills, combine their own advantages, and achieve improvement in logistics, energy utilization, and intelligent level. On the other hand, it is necessary to make full use of the regional resources and energy advantages of the western region, overlay them with the steel industry, and turn resources into competitive advantages, so as to achieve sustainable development."

Hu Zhichun further said that in terms of practicing internal skills, enterprises should do a good job of periodic internal indicators and cost-centered systematic optimization, and take green low-carbon technology and digital technology as an important starting point to build future competitiveness. In terms of exploiting regional superior resources, enterprises should make full use of the advantages of scenic power in northwest China, hydropower and vanadium titanium ore in Southwest China, and create processes and products based on superior resources. Based on the characteristics of downstream industries in the western region, explore high value-added segmented products to achieve coordinated development with the market; Build technology, product and industrial alliances based on superior resources in the region, and coordinate the cultivation of industrial alliances with the government investment investment system to promote the coordinated and high-quality development of upstream and downstream industries.