China Iron and Steel Association held an information conference for the first quarter of 2023 in Beijing on April 26 to introduce the operation of the steel industry. Tang Zujun, vice president of the Steel Association, introduced the characteristics of the iron and steel industry in the first quarter, the difficulties faced and the situation, as well as the key tasks in the later period.

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However, the steel supply intensity is higher than the growth of consumption, the steel inventory of enterprises is increasing year on year, the steel price is falling more than the price of raw fuel, and the profit margin of the steel industry is at a low level. In the face of the new market environment, the iron and steel industry earnestly studied and implemented the spirit of the Party’s 20 National Congress and the spirit of the Central Economic Work Conference, fully, accurately and comprehensively implemented the new development concept, accelerated the implementation of the green and low-carbon development, “cornerstone plan” and other key tasks of the industry, and made new achievements in high-quality development.

Operation characteristics of iron and steel industry in the first quarter

Steel production rose year on year and market demand improved. According to the data released by the National Bureau of Statistics, in the first quarter, China’s crude steel output 261.56 million tons, an increase of 6.1% year on year; The output of pig iron was 21.83 million tons, up 7.6% year on year; Steel output was 332.59 million tons, up 5.8 percent year on year. In the first quarter, the equivalent crude steel apparent consumption was 243.42 million tons, up 1.9% year on year; Key enterprises monthly steel inventories are higher than the same period last year, supply intensity is higher than consumption growth. In March, the output of pig iron, crude steel and steel was 78.07 million tons, 95.73 million tons and 127.25 million tons, up 7.3 percent, 6.9 percent and 8.1 percent, respectively. The average daily output of crude steel was 3.09 million tons/day, the highest level for the same period in the calendar year.

Steel exports increased year on year, while imports fell sharply. According to the data released by the General Administration of Customs, the first quarter, the country’s cumulative export of steel 2008.08 million tons, a year-on-year growth of 53.2%, the average export price of $1254 / ton, a year-on-year decline of 10.8%; Cumulative steel imports of 1.91 million tons, a year-on-year decrease of 40.5%, the average import price of $1,713 / ton, a year-on-year increase of 15.2%. In March, China exported 7.89 million tons of steel, up 59.6 percent year on year, and imported 682,000 tons, down 32.5 percent year on year.

The price of steel fell more, the price of raw fuel fell less. According to the China Iron and Steel Association monitoring, in the first quarter, China’s steel price index (CSPI) average was 117.32 points, down 13.68% year-on-year; The average purchasing cost of coking coal for key iron and steel enterprises decreased by 4.70% year on year; The Platts 62% iron ore index was $127.06 / ton in the first quarter, equivalent to a year-on-year decline of 9.13% in RMB. Since the beginning of this year, the steel price has been rising month by month. The CSPI stood at 118.54 as of the end of March, up 2.88 percent from the end of last year, but the price of imported iron ore has also been rising month by month, reaching $117.70 per ton in March, up 27.8 percent from the end of last year.

Industry benefits pick up month by month, year-on-year decline is still large. According to the steel association statistics, in January, February, March, the key statistics of the total profit of iron and steel enterprises were 2.545 billion yuan, 2.859 billion yuan, 10.325 billion yuan, losses narrowed month by month. In the first quarter, the key statistics of iron and steel enterprises operating revenue 1,554.5 billion yuan, an increase of 2.24%; Operating cost was 1,466.3 billion yuan, up 5.90% year on year, 3.66 percentage points higher than the revenue growth; The total profit was 15.968 billion yuan, down 71.49% year on year; Sales profit margin was 1.03%, down 2.65 percentage points year-on-year. At the end of March, the asset-liability ratio of key statistical enterprises was 62.53 percent, up 1.01 percentage points year-on-year.

Adhere to green and low-carbon development, energy saving and emission reduction effect. According to the statistics of the Association, in the first quarter, the total amount of wastewater discharged by member iron and steel enterprises decreased by 16.39% year-on-year, chemical oxygen demand emission decreased by 22.30% year-on-year, ammonia nitrogen emission decreased by 12.16% year-on-year, sulfur dioxide emission decreased by 15.75% year-on-year, particulate matter emission decreased by 13.21% year-on-year, nitrogen oxide emission decreased by 9.82% year-on-year. Electricity consumption per ton of steel decreased by 3.05% year-on-year, and new water consumption per ton of steel decreased by 6.0% year-on-year. Up to now, the transformation of ultra-low emission has been progressing smoothly on the whole. 50 enterprises with a capacity of 253 million tons of crude steel have completed the whole process of ultra-low emission transformation, evaluation and monitoring, and 27 enterprises with a capacity of 162 million tons of crude steel have completed partial transformation (organized, unorganized or clean transportation). There are 48 enterprises before the public expert audit and enterprise further improvement and rectification, involving steel production capacity of about 89 million tons.

Second, difficulties and challenges faced by the steel industry

First, the intensity of steel supply is higher than the growth of consumption, and enterprise inventories are rising year on year. In the first quarter, China’s crude steel output increased by 6.1% year on year, while the equivalent crude steel apparent consumption only increased by 1.9% year on year, and steel inventories in steelmakers were higher than the same period last year.

Second, the industry profit decline is obvious, accounts receivable growth faster. According to the statistics of the Steel Association, the first quarter, the key statistics of the total profit of iron and steel enterprises fell 71.49% year on year; At the end of March, the balance of enterprise receivables reached 173.9 billion yuan, a year-on-year increase of 16.72%.

Third, steel prices fell significantly, the original fuel prices remain relatively high. Recently, the price of steel in the domestic market continues to fall rapidly, although the price of raw fuel has also fallen, but still at a relatively high level, steel enterprises are facing severe challenges in production and operation.

The basis of the high quality development of the steel industry is to realize the smooth operation of the steel industry, and the key to the smooth operation of the industry is to achieve the dynamic balance of supply and demand. The majority of iron and steel enterprises should strengthen self-discipline together, pay close attention to the total demand and structural changes of the downstream steel industry, rationally grasp the pace of production, and reasonably control the steel inventory of enterprises; Should jointly adhere to the “three for three not” business principle (” sales to determine production “, do not turn cash into inventory; “Set production by effect”, do not produce operational “blood loss”; “Sell at present”, do not turn cash into receivables), and jointly maintain the smooth operation of the steel market.

Iii. Key tasks of the industry in the later stage

In the next stage, the iron and steel industry will, in accordance with the decisions and arrangements of the CPC Central Committee and The State Council, fully, accurately and comprehensively implement the new development concept, accelerate the construction of a new development pattern, continue to focus on the “1231” industry development goal and “232” work system, adhere to the response policy of “rational market judgment, realistic concrete measures, and positive overall response”. Actively adapt to changes in market demand, strive to maintain a dynamic balance between supply and demand, take multiple measures to promote high-quality development of the industry, focusing on the following aspects of work:

First, we will strengthen industry self-discipline and promote the establishment of a new mechanism for regulating production capacity. The precondition of production is consumption, and the core of enterprise management is profit. We should follow the self-disciplined production mode of “to meet the needs of users and the principle of supply and demand balance”, realize the market-oriented mode oriented supply and demand balance, oriented survival of the fittest, and form a new mechanism in line with the law of the market and market requirements with both energy consumption and carbon emission policy constraints, as well as industry self-discipline and government supervision.

Second, continue to deepen the potential of the bid to stabilize economic benefits. It is an important means for iron and steel enterprises to strengthen the base and consolidate the capital, maintain survival and seek development. In the face of the high price of raw fuel materials, as well as the continuous increase of green and low-carbon input, iron and steel enterprises should continue to deepen the potential of the bid, through the full dimension of the bid, the whole system to find the difference, all-round improvement, greatly improve the management efficiency, operational efficiency, management quality, constantly enhance the ability to resist risks, and strive to maintain the stability of economic benefits.

Third, vigorously promote joint restructuring and improve industrial concentration. The joint restructuring of iron and steel enterprises is not only conducive to optimizing the industrial layout, reducing homogeneous competition, and improving the bargaining power between the upstream and downstream, but also conducive to integrating the technology research and development system, promoting the upgrading of technology and equipment and the optimization of product structure, improving the operation efficiency and benefits of enterprises, and weakening the adverse cyclical effects. It is necessary to promote the establishment of a national unified large market in the steel industry, break regional monopolies, and remove institutional obstacles hindering restructuring.

Fourth, we will carry out three major transformation projects to promote green and low-carbon development of the industry. As planned, the three steel renovation projects covering the whole industry, namely “capacity replacement”, “ultra-low emission” and “extreme energy efficiency”, were carried out in an orderly manner, coordinated with national ministries and commissions to sort out steel capacity replacement projects, and strictly inspected and inspected capacity violations. We will continue to promote the transformation of iron and steel enterprises to achieve ultra-low emissions, promote the implementation of the Three-year Action Plan for Energy Efficiency Benchmark in the Steel Industry, and guide the steel industry to carry out extreme energy efficiency work. We will promote research, development, promotion and application of common low-carbon technologies in industries, and establish a data governance system for energy consumption. Promote the mutual recognition of EPD industry and international mutual recognition, and strive for the acceptance and use of EPD reports.

Fifth, we will promote the implementation of the development plans for the two major industries and strengthen upstream and downstream cross-industry cooperation. We will implement the Cornerstone Plan and the steel application expansion plan focusing on the promotion of steel-structure residential buildings, and strengthen cross-industry cooperation in upstream and downstream areas. We will promote orderly development of domestic iron ore resources, overseas equity iron ore, recycling and utilization of scrap steel resources, and improve the resource guarantee ability for the sustainable development of the iron and steel industry. Promote the popularization and application of steel structure as a whole, promote the deep integration of intelligent buildings and steel industry, and expand the application of steel.

Sixth, we will jointly promote innovation in key technologies and products to inject new impetus into the high-quality development of the industry. We will implement the Shanghai Consensus, explore and pilot mechanisms for research and development of generic technologies, and focus on overcoming bottlenecks in steel materials and core technologies. We will strengthen the development of standards in key areas such as new materials, low-carbon and intelligent manufacturing, and jointly develop standards for key varieties of “special, refined and high quality”. We will strengthen the construction of an innovation ecosystem, organize exchanges between upstream and downstream products of the industrial chain and their application technologies, and form joint efforts to tackle key core technologies.

Seventh, build a digital ecosystem and strive to improve the level of intelligent manufacturing in the industry. We will carry out trials and demonstrations of smart manufacturing in steel enterprises, make breakthroughs in a number of key generic technologies for smart manufacturing, and build a number of demonstration factories for smart manufacturing. Accelerate the construction of intelligent manufacturing standard system, accelerate the construction of steel industry intelligent manufacturing service platform, industrial Internet platform and other data platforms, realize the joint construction, co-governance and sharing of the steel industry and upstream and downstream industries, create a digital ecology, and guide the overall intelligent manufacturing of the steel industry

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