In September, the national daily production level of crude steel fell to the lowest value in the past three years
The steel industry promotes reduction and quality improvement
On October 25, China Iron and Steel Association held a third quarter information conference in Beijing.
The data shows that from January to September this year, the total profit of China Steel Association's iron and steel enterprises achieved 319.3 billion yuan, an increase of 1.23 times over the same period last year.
In September, the national daily output level of crude steel fell to the lowest value in the past three years, and the output reduction policy took effect.
In general, the steel industry performed well in the first three quarters, but it also faced challenges such as a more complex market environment and increased difficulty in reducing costs and increasing efficiency.
Qu Xiuli, vice chairman and secretary-general of the China Iron and Steel Association, emphasized that the steel industry must seek progress while maintaining stability and reduce development.
Production reduction is effective
China is the world's largest steel producer, with crude steel output accounting for more than half of the global crude steel output.
The iron and steel industry, as a major carbon emitter in the manufacturing industry, has become one of the focuses of China's carbon emission reduction.
Since the beginning of this year, on the basis of strict control of new production capacity and strengthening of total energy control, the state has formulated an industrial policy for the annual crude steel output not to be higher than last year's goal and restricting the export of large quantities of steel.
Over time, the effects of relevant policies have become increasingly apparent.
According to data released by the National Bureau of Statistics, from January to September, the national output of pig iron, crude steel and steel was 671.07 million tons, 805.89 million tons and 1.003.35 million tons, respectively, a year-on-year decrease of 1.3%, an increase of 2.0% and an increase of 4.6%. The growth rate was 5.1, 2.5 and 1.0 percentage points lower than the same period last year.
In quarterly terms, the output of crude steel in the first quarter increased by 16% year-on-year, the second quarter increased by 8% year-on-year, and the third quarter fell by 15% year-on-year.
Among them, in September, the national daily output of crude steel was 2.4583 million tons, a decrease of 8.45% month-on-month, a year-on-year decrease of 21.2%, and a decrease of 24.6% from the peak in April, which was the lowest value in the past three years.
"As long as the daily crude steel production level in the fourth quarter remains at the level of September, the annual crude steel output can be guaranteed to decline year-on-year." Wang Yingsheng, chief economist of the China Iron and Steel Association, pointed out that if China's crude steel production in the fourth quarter is calculated based on the September daily production level , Then this year’s crude steel output will be 1.03 billion tons, a decrease of more than 30 million tons from last year’s 1.065 billion tons.
The slowdown in China's crude steel production growth is directly related to changes in market demand, in addition to the impact of policy factors.
Li Xinchuang, Secretary of the Party Committee and Chief Engineer of the Metallurgical Industry Planning and Research Institute, analyzed and pointed out that the prosperity level of China's manufacturing industry has fallen, and market demand has declined.
On the supply side, as the crude steel output reduction has entered a substantive stage of advancement, domestic crude steel production will maintain a low level of operation.
On the consumer side, it is estimated that China's steel consumption demand in 2021 will be basically the same as in 2020 or will decline slightly.
In terms of exports, China has adjusted tariffs on steel products twice this year, reflecting the policy orientation of domestic steel production to give priority to domestic demand.
According to data released by the General Administration of Customs, from January to September, the country exported 53.02 million tons of steel products, a year-on-year increase of 31.3%. Among them, exports fell for three consecutive months from July to September, and exported 4.92 million tons in September, a decrease from the previous month. 2.6%, 38.3% lower than the highest value in April (7.99 million tons).
High efficiency faces the test
Since the beginning of this year, China's economy has continued to recover and develop, bringing huge business opportunities to the steel industry.
However, the economic recovery process of various countries is divided, the external environmental risks and challenges have increased, and the domestic economic recovery is still unstable and uneven, which also makes the operation of the industry face uncertain.
The data shows that the market fluctuates greatly, and the prices of main raw materials and steel materials used in steel production have gradually increased, and the overall level is higher than last year.
From January to September, the average price of imported fine ore was US$171.67/ton, an increase of 72.64% year-on-year, the price of coking coal increased by 57.07% year-on-year, the price of coke increased 56.88% year-on-year, and the price of scrap steel increased 36.48% year-on-year.
From January to September, the average China Steel Price Index (CSPI) was 143.26 points, a year-on-year increase of 39.85%.
Thanks to market demand and continuous benchmarking of enterprises to tap their potential, the economic efficiency of the steel industry has improved significantly, and the asset-liability structure has been further optimized.
According to the statistics of the Iron and Steel Association, from January to September, the operating income of member steel companies was 5,299.8 billion yuan, a year-on-year increase of 42.52%; operating costs were 4,694.42 billion yuan, a year-on-year increase of 39.65%, and the cost increase was lower than the revenue increase by 2.87 percentage points; the total profit was 3,193. 100 million yuan, an increase of 1.23 times year-on-year; the average sales profit rate was 6.03%, an increase of 2.18 percentage points year-on-year.
At the end of September, the asset-liability ratio of member steel companies was 61.37%, a year-on-year decrease of 1.58 percentage points.
It is worth noting that, compared with the profit growth trend in the first five months, after June, due to factors such as output decline, price decline, and cost increase, the profits of China Steel Association member companies declined month-on-month.
Among them, the profit achieved in September was 29.4 billion yuan, a decrease of 10.8% from the previous month; the sales profit rate was 4.74%, a decrease of 0.68% from the previous month.
Qu Xiuli analysis pointed out that the prices of resources and energy have risen sharply, making it more difficult for companies to reduce costs and increase efficiency.
Since the second half of the year, under the influence of various measures, the price of iron ore has fallen sharply, currently fluctuating around US$120/ton, but still at a high level.
At the same time, the supply-demand relationship between coal and coke is tight, and prices have risen sharply and rapidly.
Especially since September, due to the tight power supply, steel companies have cut production and stopped production more, and corporate costs will increase significantly. The pressure of rising costs is difficult to change in the short term, and the profitability of steel companies is facing a downward trend.
Reducing quantity and improving quality is the key
In the context of low-carbon development, the steel industry as an energy-intensive industry needs to be reshaped.
The just-announced "Opinions of the Central Committee of the Communist Party of China and the State Council on the Complete, Accurate and Comprehensive Implementation of the New Development Concept to Do a Good Job in Carbon Peaking and Carbon Neutrality" clearly stated that the steel industry should formulate implementation plans for carbon peaking, consolidate the results of capacity reduction, and resolutely curb high energy consumption. A number of measures including the blind development of emission projects.
For a period of time, as the steel market has become more prosperous, the impulse to expand steel production capacity in some places and companies has risen.
This year, the relevant departments have organized a nationwide "look back" on iron and steel capacity reduction and the reduction of crude steel output, continuously consolidating and improving the effectiveness of related work.
Qu Xiuli emphasized that the "dual control" of production capacity and output, the "dual control" of total energy consumption intensity, and the "dual carbon" targets require the steel industry to reduce development.
Iron and steel enterprises must conscientiously unify their thoughts and actions to the central government’s decision-making and deployment of strict control of steel production capacity, truly change the development concept, strictly implement the relevant regulations and requirements of the implementation measures for steel production capacity replacement, maintain the results of capacity reduction, and continue to promote supply-side structural reforms. Accelerate the pace of structural adjustment, transformation and upgrading, and continue to optimize and improve the industrial structure.
"The quantity-based growth mode of China's steel industry has gradually reached the ceiling, and the space for high-quality development is infinite." Chen Ziqi, deputy secretary-general of the Expert Academic Committee of China International Engineering Consulting Co., Ltd. The improvement of people's living standards, green development and "dual-carbon" goals, etc., all put forward new requirements for the high-quality development of the iron and steel industry.
The iron and steel industry must enhance the endogenous power of development such as independent innovation capabilities, develop new materials and products such as super high-speed rail steel, new energy steel, large aircraft steel, green seismic construction steel, and ultra-high-strength steel, and develop low-carbon New processes and technologies such as metallurgy will achieve a higher level of dynamic balance between supply and demand.
According to news from China Iron and Steel Association, related planning and policy documents such as the implementation plan for carbon peaking in the iron and steel industry are being formulated. The Steel Association also proposed to achieve the goal of achieving carbon peaking by 2030 during the "14th Five-Year Plan" period.
He Wenbo, executive chairman of the China Iron and Steel Association, said a few days ago that to achieve the "dual carbon" goal, we must basically seek a way out in technological advancement, work hard in research and development, and seek breakthroughs in technological innovation; we must accelerate the reform of the research and development system and mechanism to stimulate Innovative vitality.