In the second quarter of this year, the steel market is operating steadily in an effort to reverse the high output and low efficiency of the steel industry.

Core Tips In the second quarter of 2011, the economic index of the China Steel Industry fell slightly by 0.2 points from the previous quarter. The early warning index of the China Steel Industry has remained in the green light zone for six consecutive quarters, indicating that the overall operation of the steel industry is stable.
This year is the first year of the “Twelfth Five-Year Plan”. The iron and steel industry, as an important basic industry and pillar industry of the national economy, should focus on transforming the mode of development. Energy conservation, emission reduction, quality, backwardness, and joint restructuring should be the focus of structural adjustment to improve the economy. Benefits and competitiveness to achieve health and sustainable development.

The industry maintains a stable operating trend “From the index report, the overall operation of China's steel industry in the second quarter is still relatively stable.” Chen Ziqi analysts believe that from the output point of view, from January to May this year, China's crude steel production was 290.35 million tons , an increase of 8.5% over the same period last year, the average daily output of crude steel in June was close to 2 million tons, equivalent to an annual output of more than 700 million tons of crude steel. Steel society stocks in 22 cities and 5 steel products across the country reached 12.11 million tons at the end of April, a year-on-year increase of 24.6%. The inventory of 79 large and medium-sized iron and steel enterprises counted by the China Iron and Steel Association reached 9.49 million tons at the end of April. Increased by 5.6%. This shows that the current demand for steel products in China is large and the output is very high. In general, supply exceeds demand. It is expected that the third quarter will basically continue its stable operation in the second quarter.
From the price point of view, the steel prices in January and February of this year are in a rising phase. At the end of February, the price of steel increased by 2.14% from the beginning of the year. From the end of February, the price of steel products began to fall. At the end of March, the price fell by 3.37% from the end of February. Since April, steel prices have generally been in the adjustment stage of fluctuations, but the upward adjustment is still insufficient. After mid-June, steel prices have declined.
From the aspect of import and export, from January to May of this year, China's exports of steel and steel billets were converted to 7.516 million tons of crude steel, a year-on-year decrease of 1.67%. In general, the global steel market is also in a situation of oversupply.
Chen Ziqi believes that in recent years, China's steel industry is in a situation of high output and low efficiency. In the second quarter of this year, the sales margin of the steel industry was only 2.4%, which was far below the national industrial sales margin of 6.2%. There are two main reasons for this, firstly, the increase in the price of imported iron ore has severely squeezed the profit margin of China's steel industry. From January to May of this year, the price of iron ore rose by 46% year-on-year; the first four months of the year The additional expenses caused by the increase in the price of imported iron ore reached 84.74 billion yuan, accounting for 7.43% of the sales income of large and medium-sized steel enterprises. Second, due to the deep structural conflict in the steel industry itself, such as overcapacity, low industrial concentration, and weak innovation capability. Judging from the current situation, this passive situation cannot be fundamentally changed in the short term, and iron and steel enterprises must have ideological preparations for too tight days.

Efforts to increase the proportion of high-end products "After many years of construction and transformation, the level of equipment in China's steel industry has been significantly improved. Major and medium-sized enterprises have one or more modern production lines, and some of them have reached the international advanced level," said Chen Ziqi. It should be noted that there is still a big gap between the grade and quality of steel products in China compared with developed countries, and some high-grade key steel products cannot meet the needs and still need a lot of imports.Therefore, more high-tech and high value-added products are produced to meet downstream industries. The transformation and upgrading need to produce more high-grade products with limited resources is an important way for the steel industry to change its development mode, and it is also an effective measure to change the passive situation of high output and low efficiency.”
It is understood that in early July of this year, relevant persons in charge of the Ministry of Industry and Information Technology, the Ministry of Housing and Urban-Rural Development conducted consultations on the establishment of a coordination mechanism for the promotion and application of high-strength steel bars. The two sides agreed to establish a cooperation and coordination mechanism, set up a coordination group for the promotion and application of high-strength steel bars, and promote the convergence of "Steel Standards for Reinforced Concrete" and "Code for the Design of Concrete Structures", determine the promotion and application goals and road map, and propose safeguard measures. This is of great significance for promoting the coordinated development and transformation and upgrading of upstream and downstream industries in the iron and steel industry and promoting the healthy development of the steel industry.
On July 1 this year, the new "Code for Design of Concrete Structures" was formally implemented. The new "Design Code" first included the use of 500MPa (megapascal) grade steel standards, require the priority use of 400MPa grade steel, actively promote 500MPa grade steel, HPB300 light round bar instead of HPB235 light round steel, gradually reduce the use of 335MPa level Rebar and eventually cancel the variety.
Chen Ziqi said that due to various reasons, the overall level of China's steel production and consumption structure is not high, and some steel products have a low level of domestic consumption. The development, promotion, and use of new varieties are slow. The 335MPa grade rebar that has long been discontinued internationally is still being used in large quantities in China. In 2010, China's total output of steel bars was approximately 141 million tons, of which high-strength steel bar production of 400 MPa and above was only 57 million tons, accounting for only 40%, and the remaining 60% was still 335 MPa. If all 400MPa and above high-strength steel bars are used in place of 335MPa steel bars, the consumption of steel bars can be reduced by more than 10 million tons per year, and the annual reduction in consumption of iron ore by more than 17 million tons, reduction of energy consumption by more than 6 million tons of standard coal, and reduction of smoke. Emissions of atmospheric pollutants such as dust and dioxide* are tens of thousands of tons, and economic and social benefits are significant, which is conducive to the construction of two types of society.
However, as far as the current situation is concerned, large-scale promotion of high-strength threaded steel bars does have some resistance. “One of the resistances comes from costs.” Chen Ziqi pointed out, “To fully replace 335MPa grades of 400MPa and above rebar, in addition to modifying the use of standard specifications, steel companies need to improve their technological level and reduce costs. Currently, many steel plants are studying Microalloying plus controlled rolling and cooling technology to produce high-strength steel bars to reduce costs.”
Chen Ziqi said that during the “Eleventh Five-Year Plan” period, the share of special steel and alloy steel in China has increased, and the output of high-grade secondary energy steel has also been greatly improved. For example, the X80 pipeline steel of the Second West-East Gas Pipeline Project is basically domestic. The supply of steel mills. During the “Twelfth Five-Year Plan” period, the steel industry should focus on strengthening its independent innovation capabilities, and use technological innovation to drive structural adjustment and industrial upgrading to form the autonomous integration of key processes in the entire process and the autonomy of key process equipment.

Adjusting the level of development on the level of “At present, the overall oversupply of China's steel market, coupled with the formation of an oligopoly in the international iron ore market, the price of imported iron ore is unlikely to drop significantly. Therefore, the steel industry will be a considerable period of time in the future. Will continue to maintain the trend of low-margin operation." Chen Ziqi analysis that the trend of the steel industry and the national economy are inseparable. Therefore, we can make scientific judgments and understandings of the development stage and operational characteristics of the steel industry from a macro perspective.
At present, China is in a critical period of transforming the development mode. Under this background, the demand for steel products from the entire society will shift from high-speed growth during the “11th Five-Year Plan” period to slow growth during the “12th Five-Year Plan” period. At the same time, China will nurture and develop strategic emerging industries and transform and upgrade the manufacturing industry. This will cause the steel industry to face two changes. First, the growth of ordinary steel demand will slow or even decline. Second, the demand for high-end steel products will increase. Therefore, the steel industry must effectively change the mode of development, vigorously promote structural adjustment, promote industrial upgrading, and meet new requirements for the development of the national economy.
During the "12th Five-Year Plan" period, China's steel industry will speed up the pace of mergers and reorganizations. The state supports the advantages of large-scale steel companies in the development of cross-regional, cross-industry, cross-ownership restructuring, and encourages regional iron and steel companies to reorganize to increase industrial concentration and strive for Increase the concentration of the top ten to more than 60%. During the "12th Five-Year Plan" period, China will completely eliminate 400 cubic meters or less of blast furnaces and 30 tons or less of converters and electric furnaces.
On July 11 this year, the Ministry of Industry and Information Technology announced the list of 18 industrial enterprises that have eliminated backward production capacity. The backward production capacity of these enterprises must be completely eliminated by the end of 2011. Among them, elimination of outdated ironmaking capacity involves 96 companies in 19 provinces (autonomous regions and municipalities), totaling 31.22 million tons; elimination of outdated steelmaking capacity involves 58 companies in 19 provinces (autonomous regions and municipalities), totaling 27.94 million tons.
In addition, during the “12th Five-Year Plan” period, the steel industry will face increasingly strengthened constraints on resources and environment, and it must focus on promoting green and low-carbon development. Chen Ziqi believes that although iron and steel companies have done a lot of work on energy saving and emission reduction, due to the high energy consumption and resource industries in the steel industry, the current achievements are far from enough. The steel industry should strengthen its work on energy conservation and emission reduction, the development of recycling economy, and the promotion of low-carbon development, and actively promote sintering waste heat recovery and flue gas removal*, high temperature and high pressure dry quenching, dry gas dust removal and comprehensive utilization of metallurgical slag. In addition, iron and steel enterprises should establish energy control centers, optimize energy structure, increase resource and energy use efficiency, and implement cleaner production.